CIHM 
Microfiche 


({Monographs) 


ICIVIH 

Collection  de 
microfiches 
(monographles) 


Canadian  Institute  for  Historical  Microreproductions  /  Institut  Canadian  da  microraproductions  historiques 


1998 


Technical  and  Bibliographic  Notes  /  Notes  techniques  et  bibliographiques 


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D 
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Coloured  covers  / 
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Covers  damaged  / 
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\/]   Showthrough  /  Transparence 

I      I   Quality  of  print  varies  / 


D 

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This  item  !•  filmed  at  the  reduction  ratio  checked  below  / 

Ce  document  est  fitme  au  laux  de  reduction  indique  ci-dessoui. 


10x 

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empreinte. 


The  last  recorded  frame  on  each  microfiche 
shall  contain  the  symbol  -^^  (meaning  "CON- 
TINUED"), or  the  symbol  V  (meaning  "END"), 
whichever  applies. 


Un  des  symboles  suivants  apparaitra  sur  la 
darniire  image  de  cheque  microfiche,  selon  le 
cas:  le  symbols  -^  signifie  "A  SUIVRE".  le 
symbole  V  signifie  "FIN". 


Maps,  plates,  charts,  etc.,  may  be  filmed  at 
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beginning  in  the  upper  left  hand  corner,  left  to 
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required.  The  following  diagrarr. '  illustrate  the 
method: 


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Lorsque  le  document  est  trop  grand  pour  etre 
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de  Tangle  supArieur  gauche,  de  gauche  A  droite, 
et  de  haut  an  bas,  en  prenant  le  nombre 
d'images  ndcessaire.  Les  diagrammes  suivants 
illustrent  la  mAthode. 


1 

2 

3 

1 

2 

3 

4 

5 

6 

MICROCOPY   RESOIUTION   TEST   CHART 

(ANSI  and  ISO  TEST  CHART  No    2) 


1.0 


I.I 


■  50      ™"= 

It  13.6 


2.5 
2.2 

2.0 
1.8 


^  /APPLIED  IM^GE     Ir 

^^  1653   East    Main    Street 

r^a  Rochester.    New   York         14609       uSA 

^S  (716)    482  -  0500  -  Ptione 

^S  (716)   288  -  5989  -  Fok 


f)aTt,  S»tl)affner  &  fRtvj: 
Priie  (Etonomtc  (Cesaps 


THE   CAUSE   AND    EXTENT   OF   THE 
TRIAL  PROGRESS  OF  GERMANY.    Bj 


CENT  INDUS- 
irl  D.  Howard. 


THE   CAUSES  OF  THE  PANIC  OF  1893 
Lauck. 


INDUSTRIAL    EDUCATION. 
Ph.D. 


By  William  J. 
By  Harlow  Stafford  Person, 
By  Al- 


FEDERAL   REGULATION    OF    RAILWAY   RATES 
bf't  N.  Merritt,  Ph.D. 

SHIP  SUBSIDIES.  An  Economic  Study  of  the  Policy  of  Sub- 
siduing  Merchant  Marines.     By  ''^iUtr  T.  Dunmore. 

SOCIALISM:  A  CRITICAL  ANAL/SIS.     By  O.  D.  Slcelton. 

INDUSTRIAL  ACCIDENTS  AND  THEIR  COMPENSATION. 
By  Gilbert  L.  Campbell,  B.  S. 

THE  STANDARD  OF  LIVING  AMONG  THE  INDUSTRIAL 
PEOPLE  OF   AMERICA.     By   Frank  H.  Streightoff. 

THE    NAVIGABLE   RHINE.     By  Edwin  J.  Oapp. 

HISTORY  AND  ORGANIZ*  'ON  OF  CRIMINAL  STATIS- 
TICS IN  THE  UNITED  jTATES.  By  Louis  Newton 
Robinson. 

SOCIAL  VALUR.    By  B.  M.  Anderson,  Jr. 

FREIGHT  CLASSIFICATION.     By  J.  F.  Strombeck. 

WATERVI/AYS  VERSUS  RAILWAYS.  By  Harold  Glenn 
Moulton. 

THE  VALUE  OF  ORGANIZED  SPECULATION.  By  Harri- 
son  H.  Brace. 

INDUSTRIAL  EDUCATION:  ITS  PROBLEMS,  METHODS 
AND  DANGERS.     By  Albert  H.  Leake. 

THE  UNITED  STATES  INTERNAL  TAX  HISTORY  FROM 
1 86 1  TO  1 87 1 .     By  Harry  Edwin  Smith. 


WELFARE  AS  AN  ECONOMIC  QUANTITY, 
kins. 


By  G.  P.  Wat- 


CONCILIATION  AND  ARBITRATION  IN  THE  COAL  IN- 
DUSTRY IN  THE  UNITED  STATES.  By  Arthur  E.  Suf- 
fern. 

THe  CANADIAN  IRON  AND  STEEL  INDUSTRY.  By  \V.  J. 
A.  Donald. 

THE  TIN   PLATE  INDUSTRY.     By  D.  E.  Dunbar. 

THE  MEANS  AND  METHODS  OF  AGRICULTURAL  EDU- 
CATION.    By  Albert  H.  Leake. 

HOUGHTON   MiKFLIN   COMPANY 
Boston  and  New  York 


^<xvt,  ^c^affner  &  (jriarx  (pd^e  e»M^» 


XIX 


THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

A  STUDY  IN  THE  ECONOMIC  fflSTORY 
OF  A  PROTECTED  INDUSTRY 


THE  CANADIAN 
IRON  AND  STEEL  INDUSTRY 

A  STUDY  IN  THE  ECONOMIC  HISTORY 
OF  A  PROTECTED  INDUSTRY 


BY 

W.  J.  A.  DONALD,  Ph.D. 

McMailer  Univeriily 


BOSTON  AND  NEW  TOBK 

HOUGHTON  MIFFLIN  COMPANY 

«!»  AiteT^br  f^Hf  €atnlirt&te 

1915 


COPYMOHT,   IQIS,   BV   HART,  SCHAPPNBR   *   MARX 
ALL   RIGHTS  RBSBRVCD 


Publi.ikeJ  Stpttmber  iqij 


PREFACE 


This  series  of  books  owes  its  existence  to  the  generosity 
of  Messrs.  Hart,  Schaffner  &  Marx,  of  Chicago,  who  have 
shown  a  special  interest  in  trying  to  draw  the  at»»ntion  of 
Ameri'an  youth  to  the  study  of  economic  and  commercial 
subjects.  For  this  purpose  they  have  delegated  to  the  un- 
dersigiH'd  committee  the  task  of  selecting  or  approving  of 
topics,  making  announcements,  and  awarding  prizes  an- 
nually for  those  who  wish  to  compete. 

For  the  year  ending  June  1,  1913.  there  were  offered:  — 

In  Class  A,  which  included  any  American  without  re- 
striction, a  first  prize  of  $1000,  and  a  jecond  prize  of  $500. 

In  Class  B,  which  inciuded  any  who  were  at  the  time 
undergraduates  of  an  American  college,  a  first  prize  of 
$300,  and  a  second  prize  of  $200. 

Any  essay  submitted  in  Class  B,  if  deemed  of  sufficient 
merit,  could  receive  a  prize  in  Class  A. 

The  pre-sent  volume,  submitted  in  Class  A,  was  awarded 
honorable  mention  in  that  class. 

J.  Laurence  Laughlin,  (  hairman, 

University  of  Chicago. 
J.  B.  Clark, 

Columbia  University. 
Henrt  C.  Adams, 

University  of  Michigan. 
Horace  White, 

New  York  City. 
Edwin  F.  Gat, 

Harvard  University. 


i 


AUTHOR'S  PREFACE 


This  book  is  an  attempt  to  study  the  economic  history 
and  problems  of  a  particular  Canadian  industry.   It  was 
undertaken  in  a  twofold  belief.  In  the  urst  place,  the  gen- 
eral economic  history  of  Canada  can  never  be  thoroughly 
understood  or  p.ojierly  written  until  a  number  of  studies, 
similar  to  the  one  at  hand,  provide  the  detailed  basis  for 
general  conclusions.   Wanting  the  detailed  studies  of  par- 
ticular phases,  those  w  ho  have  written  on  general  economic 
history,  heretofore,  have  emphasized  the  obvious  features, 
namely,  the  political  incidents  and  problems.   It  is  to  be 
hoped  that  we  may  soon  have  other  studies  of  this  kind 
contributing  to  the  knowledge  of  the  general  economic  his- 
tory of  Canada. 

In  the  second  place,  the  writer  was  interested  in  what 
has  been,  and  may  soon  become  again,  a  serious  contro- 
versial  problem  in  Canada,  namely,  the  relation  of  protec- 
tion to  the  growth  of  the  Canadian  iron  and  steel  inr'     try. 
At  the  same  time,  he  realized  the  difficulty  of  treatii.      jch 
a  controversial  political  problem  impartially.  I'o  avo  a  dis- 
cussing the  topic  in  a  partisan  manner  anrl  to  present  a 
treatment  that  would  command  'mpartiaj    v.,ding  was 
essential.   One  method  suggested     «  If,  and  t!  at  method 
fitted  mto  what  became  the  main  purpose  of  the  book. 
The  writer  hopes  that  by  making  the  economic  history  of 
a  protected  mdustry  the  main  theme  of  the  book,  and  by 
treating  the  controversial  topic  as  of  secondary  import- 
ance, two  purposes  have  been  fulfilled.  The  economic  his- 
tory of  the  industry  should  contribute,  not  only  to  an  un- 
derstanding of  the  general  economic  history  of  Canada,  but 
also  to  the  solution  of  the  controverted  question;  and  by 
treating  the  controversy  respecting  protection  to  the  iron 


"<■•. 


vnii 


AUTHOR'S   PREFACE 


and  steel  industry  in  Canada  as  of  secondary  importance, 
it  has  been  given  more  impartial  consideration,  perhaps, 
than  it  might  otherwise  have  received. 

Whether  the  history  of  this  industry  has  been  scienti- 
fically treated,  the  reaJer  is  left  to  judge.  The  success  of  the 
method  of  discussing  the  protective  policy  is  partly  dem- 
onstrated by  the  fact  that  on  two  important  points  the 
writer  was  forced  to  change  his  views.  Starting  out  with 
an  opinion  commonly  accepted  in  Canada  that  the  suc- 
cess of  the  primary  iron  and  steel  industry  was  largely  due 
to  the  bounty  system,  the  writer  reached  the  conclusion 
that  the  greater  part  of  the  primary  industry  would  have 
grown  up  whether  or  not  protection  in  the  form  of  bounties 
had  been  given.  On  the  other  hand,  the  writer  now  be- 
lieves that  tariff  protection  did  have  a  stimulating  effect 
on  certain  branches  of  the  finishing  industry.  Thus  the 
method  adopted  has  at  least  succeeded  in  modifying  the 
views  of  the  author.  If  the  discussion  of  the  controversial 
problem  receives  the  impartial  attention  of  the  reader,  the 
wisdom  of  this  method  of  treating  politico-economic  prob- 
lems may  seem  amply  proved. 

The  writer  feels  deeply  indebted  to  Professor  Chester 
Whitney  Wright  of  the  University  of  Chicago  for  much 
encouragement  and  guidance  in  the  i)reparation  of  this 
book,  and  to  Mr.  Vincent  Basevi  of  the  Toronto  Bureau 
of  Municipal  Research  for  assistance  in  the  revision  of  the 
manuscript. 

W.  J.  A.  Donald. 

McMaster  Universitt, 
September,  191^. 


CONTENTS 

PART  ONE 

Introduction:  The  Economic  Background 

CHAPTER  I 

The  Industrial  Development  of  Canada 

1.  Introduction a 

2.  The  lateness  of  Canadian  industrial  development       .       .      .       4 

3.  The  French  regime "       - 

4.  The  provincial  period .6 

5.  The  first  period  of  Confederation !     13 

6.  Prosperity  in  the  twentieth  century         •       •       .       .       .  16 

7.  The  iron  and  steel  industrj- .18 


CHAFfER  n 

Natural  Resources  of  the  Canadian  Iron  and  Steel 

Industry 

§     1.  General  factors  influencing  the  availability  of  natural  re- 
sources       -^ 

§    2.  The  cost  of  mining '       '  «l 

§    3.  The  cost  of  transportation  to  the  furnace;  distance  from  fuel  21 

§    4.  The  character  of  the  ore  itself iS 

§    5.  The  question  of  ownership ■  iS 

§    C.  Canadian  resourc"^,  in  general '  *S 

§    7.  The  iron  ore  deposits  of  Nova  Scotia       •■       .       .       .  25 

§    8.  Favorable  conditions  of  the  Nova  Scotia  industry      .       .  rr 

§    9.  The  ores  of  New  Brunswick  and  Newfoundland  29 

§  10.  Natural  resources  of  Quebec 30 

§  11.  Ontario's  vast  deposits  of  iron  ores    .  31 

§  12.  The  coal  problem SS 

§  13.  Iron  ores  of  the  Northland;  Labrador  and  Ungava    .       '.  S4 

§  14.  British  Columbia's  iron  ore  and  coal  deposits       .       .  35 
§  15.  The  impo.«ib!lity  of  estim.ating  Canada's  resources    .36 


CONTENTS 


PART  TWO 

The  Iron  Industry  of  Canada  prior  to  the 
Adoption  of  the  National  Policy  in  1879 

CHAPTER  III 

The  History  of  the  Industry 

§     1.  The  tardy  development  of  the  industry 41 

§  «.  The  early  iron  industry  of  the  Province  of  Quebec     .       .       .41 

§     3.  First  attempts  in  Ontario .     49 

§  4.  The  iron  industry  of  the  Maritime  Provinces       .       .       .       !     55 

§     5.  The  manufacture  of  finished  products .59 

§    6.  A  summary  of  progress .63 

CHAPTER  IV 

Elements  of  Success  and  Failube 

§     1.  A  statement  of  the  problem ^4 

§     2.  The  revenue  tariff g4 

§     3.  The  influence  of  iron  ores gg 

§     4.  The  supply  of  fuel !       .     70 

§     5.  Transportation  facilities .71 

§     6.  Labor  and  management 70 

§     7.  Lack  of  capital .     7S 

§     8.  Prices 7S 

§     9.  The  limited  market .74 

§  10.  A  summary  and  conclusion 77 


PART  THREE 

The  Canadian  Iron  and  Steel  Industry 
1879  TO  1897 


CHAPTER  V 

The  Tariff  and  Bounty  System 

§     1 .  The  trend  toward  protection 93 

5     2.  Tlie  tariff  and  bounties  from  1879  to  1887     .       .       .       .       !     84 
§    3.  The  revision  of  1887;  changes  up  to  1894       .....     86 


CONTENTS  xi 

§    4.  The  tariff  anJ  bounties  of  1894 gg 

§    5.  Provincial  and  municipal  largesse     ■      ■      •      .  aa 

5    6.  Arguments  for  protection  q„ 

i    7.  The  tariff  and  prices       ■.'.'.'.[''  qa 

S    8.  Specific  versus  ad  valorem  duties         •       •       •       .  96 

!  ,«   ^*  ^y^  *"**  importation  of  iron  and  steel  goods     .       *  '97 

I  .  ?■  SpP?'*'""  *"  •^^t'^'"  on  pig  iron,  bar  iron,  and  scrap  iron  '.     98 

8  11.   Ihe  bounty  -.ystem;  iU  genesis  and  effects  ina 

§  12.  A  summary .'      '      '  '  104 

CHAPTER  VI 

The  Development  of  the  iNDusxBy 

§     1.  The  iron  industry  at  Londonderry,  Nova  Scotia         .  106 

8     2.  Success  m  Quebec    .       .                                                       "  '  iXa 

§    3.  The  growth  of  "Scotia"        ..".".■ {j? 

§    4.  The  revival  in  Ontario 114 

§    5.  Unsuccessful  attempts           ......  uk 

S     <>-  The  rolling  mUl  and  finishing  industiy     '.       '.       '.       '.       '.  '  ng 

§         The  factors  of  failure  or  success         •••..!  120 

§    8.  The  tariff  and  the  bounties:  a  conclusion       .                     *  '  la* 

§    9.  Summaiy .'      .'      .  127 


PART  POUR 

The  Canadian  Iron  and  Steel  Industet 
1897  TO  1914 

CHAPTER  VII 

The  General  History  of  the  Tariff  and  Bodntt 
System 

§  I    The  situation  in  1896  ,„, 

§  2.  The  Tariff  Revision  of  1897 ,,i 

§  3.  The  Bounty  Act  of  1897  ,,* 

§  4.  The  Bounty  Act  of  1899  \^ 

§  5.  The  Bounty  Act  of  1903  {?? 

§  6.  The  Tariff  Revision  of  1906  ,!! 

§  7.  The  Bounty  Act  of  1906  


163 


§    8.  The  passing  of  the  bounty  system     .       .       . 

I  .n    2!'"^.^«inty  system:  an  estimate  and  conclusion  '       '.       '  154 

8  U).  Tariff  revi.i!nn  since  1308 '  I'S 


Xll 


CONTENTS 


CHAPTER  Vm 

Various  Features  of  Tariff  and  Bounty  Legislation 

1.  The  British  preference jgg 

2.  The  drawback  system 167 

3.  Municipal  subsidies  and  Tax  exemption 170 

4.  Provincial  Assistance 172 

5.  The  Raily-ay  Act  I73 

6.  The  Clerguc  rail  contract 174 

7.  The  steel  rail  duty I75 

8.  The  dumping  clause Ig2 

9.  The  amount  of  protection  granted 187 


§  1. 

§  2. 

§  3, 

§  4. 

§  5. 
§    6. 

§  7. 
§  8. 
§  9. 
§10. 

§11. 
§12. 
§13. 
§14. 
§15. 


CHAPTER  IX 
The  Recent  History  of  thf  Industry 

Commercial  policy  and  industrial  progress 190 

A  general  statistical  statement  of  progress 191 

The  Nova  Scotia  Steel  and  Coal  Company 194 

The  steel  industry  a»  Sydney;  the  Dominion  Iron  and  Steel 

Company 200 

The  Sault  Ste.  Marie  industries;  the  lake  Superior  Corpora- 
tion     212 

The  Hamilton  steel  plant  and  allied  iuterests;  the  Steel  Com- 
pany of  Canada 219 

The  Drummond  interest;  the  Canada  Iron  Corporation    .       .  «22 
The  Canadian  Steel  Foundries,  at  Welland  and  Montreal       .  227 
MacKenzie  and  Mann  interests;  the  Atikokan  Iron  Company  228 
The  Deseronto  charcoal  furnace;  the  Standard  Iron  Com- 
pany   231 

Ferro-products,  and  the  electric  steel  industry      .       .       .       .232 

British  Columbia  operations  and  prospects 234 

The  United  States  Sttil  Corporation ass 

Miscellaneous  enterprises 236 

A  survey  of  progress 241 


CHAPTER  X 

The  Combination  Movement 

§    1.  Introduction;  disciission 244 

§    2.  Associations  and  agreements 244 

§    3.  Combination  of  competing  companies;  the  Steel  Company  of 

Canada 240 

§    4.  IntegraUonofindu8try;theNovaScotiaSteelandCoalCompany  2.54 


CONTENTS 


ziii 


§    5.  Control  of  a  coal  supply;  the  Dominion  Steel  Co-y)ration 
§    6.  Exaggerated  integration;  the  Lake  Superior  Corporn.tion 
§    7.  Community  of  interest;  th   Canada  Iron  Corporation      . 
S    8.  The  car-buildmg  industry  and  steel  castings;  the  Canail  >  Car 

r™*"''  Foundry  Company  and  Canadian  Steel  Foundries 
§    9.  The  United  States  Steel  Corporation  in  Canada  . 
§  10.  Predictions  and  di:  cussions 

§  11.  The  character  of  the  combination  movement        .       .       [  \,o 

§  12.  Interlocking  directorates 278 

§  13.  An  estimate  of  the  extent  of  the  combination  movement ."  '  281 

§  14.  i^tection  and  combinations gg^ 

CHAPTER  XI 
The  Causes  of  Recent  Progress 


1.  A  review       .... 

2.  Cheap  iron  and  steel 

3.  A  proposal    .... 

4.  The  end  of  the  bountiv^ 

5.  Protective  inconsistencies     . 

6.  The  plurality  of  interrelate^^causes  - 


256 

268 

269 
271 
273 
275 


§    1.  Introduction 

§    2.  The  importi.nce  of  resources        ...... 

§    3.  Favorable  technical  conditions    ...... 

§    4.  The  Canadian  market . 

§    5.  Industrial  organization 

§    6.  Other  conditions 

§    7.  The  position  of  the  Canadian  industi-y     .       '.       '.       .       '       "  ^ 
§    8.  The  influence  of  protection   ••......         jf99 

CHAPTER  XII 

Conclusion 


287 
287 
290 
293 
294 
29? 


.  SOS 
.  311 
.  SIS 
.  317 
.  319 

.  an 


APPENDIX 

A.  The  statistical  progress  of  Canada;  estimated  population,  miles 
of  railway  m  operation,  increase  of  railway  mileage,  gross  lia- 
bilities of  commercial  failures,  total  imports  and  exports  . 

The  production  of  iron  and  steel  in  Canada:  — 


B 


325 


Table   I. 


Pig  iron  produced  in  Canada  from  Canadian  and  from 
foreign  ore,  totds:  Pig  iron,  kentledge,  and  cast  scr^p 
iron  importei  for  home  consumption;  the  toUl  con- 
sumption; an,i  the  percentage  of  Canadian  output  to 
the  total  eoa:^umption,  sinct:  liHi'i ggg 


liv  CONTENTS 

Table  II.  Annual  production  of  pig  iron  by  Provinces  since  1886  327 
Table  III.  Annual  production  of  iron  ore  by  Provinces  since  1885  :!  < 
Table  IV.  Iron  ore  and  fuel  charged  to  fumacea  since  1886  .  .  3«9 
Table    V.  Production  of  pig  iron  in  Great  Britain,  the  United 

States,  and  the  total  world  production  ....  330 
Table  VI.  The  Production  of  steel  iD'?)t8  and  castings  i  i  calen- 
dar years,  and  the  imports  of  steel  ingots  anc  billets 
in  fiscal  years .  331 

C.  The  output  of  iron  and  steel  products  in  census  years:  — 
Table     I.  Number  of  establishments  of  certain  kinds  and  value 

of  the  products.  Decennial  figures,  1871-1911  .  .  338 
Table  II.  Number  of  establishments  employing  five  employ- 
ees aud  more;  value  of  the  capital  invested;  amount 
of  salaries  and  wages,  and  vali  :es  of  the  products,  to- 
gether with  percentage  increases  for  decennial  years, 
1891-1911 338 

D.  Rates  of  bounty  in  dollars  per  ton  on  various  iron  and  steel 

products  by  classes  and  by  years  —  1884-1912     ....  334 

E.  Bounties  paid  on  iron  and  steel  products,  1884-1912     .       .       .  335 

F.  Rates  of  duty:  — 

T(.ble     I.  Rat<>s  of  duty  on  certain  iron  and  steel  imports, 

1845-1914 336 

Table    II.  Acts  affecting  the  customs  rates  on  certain  iron  and 

steel  products,  1845-1914 337 

G.  Exports  and  imports  of  iron  and  steel:  -  - 

Table     I.  Exports  by  years 338 

Table  II.  Imports  of  iron  and  steel  and  manufactures  thereof, 
dutiable  and  free,  from  Great  Britain,  United  States, 
and  other  countries,  by  years,  1874-1914  .       .  339 

Table  III.  Value  of  imports  of  pig  iron,  wrought  scrap  iron,  steel 
billets,  etc.,  and  of  ferro-products,  by  years,  1888- 
1914 341 

Table   IV.  Value  of  imports  of  steel  rails,  wire  rods,  bar  iron 

and  steel,  and  structural  steel,  by  years,  1885-1914  .  342 

H.  American  prices  of  certain  iron  and  steel  products,  by  years, 

1860-1912 343 

I.  The  combination  movement  in  the  Canadian  iron  and  steel  in- 
dustry :  — 

Table     I.  Amalgamations 344 

Table    II.  Chart  showing  interlocking  directorates,  1912    .       .  346 


CONTENTS  j„ 

J.    Tariff  Memorials:  — 

I.  Presented  to  Finance  Minirte.-.  November  21, 1911  347 

II.  Anonvuicus     .      .  * 

353 

K.  Mapt;:  — 

I.  General  map  of  Canada ^onU  page  355 

n.  Map  of  the  Maritime  P«.vince.      .      .      .     opposite  Ze  357 

BIBLIOGRAPHY 

^57 

INDEX   .      .      . 

367 


THE  CANADIAN 
IRON  AND  STEEL   INDUSTRY 

PART  ONE 

INTRODUCTION:  THE  ECONOMIC 
BACKGROUND 


THE  CANADIAN 
IRON  AND  STEEL  INDUSTRY 

CHAPTER  I 

THE  INDUSTRIAL  DEVELOPMENT  OP  CANADA 

i  1.  Canadun  industrial  history  cannot  be  properly 
written  until  detailed  studies  of  all  the  important  phases  of 
development  are  available.  While  a  few  such  problems  aa 
banking  and  tariflf  history  have  been  more  or  less  carefully 
treated,  the  number  of  such  studies  is  altogether  too  small 
for  a  proper  understandmg  of  Canadian  industrial  develop- 
ment as  a  whole.  The  purpose  of  this  book  is,  in  part,  to 
add  to  the  available  material  by  tracing  the  development 
of  a  particular  industry. 

Among  the  various  industries  which  might  thus  be  taken 
up,  the  manufacture  of  iron  and  steel  has  seemed  to  be  the 
most  important.  Those  countries  which  have  undergone 
the  greatest  economic  development  produce  the  most  iron 
and  steel.  Great  Britain,  the  United  States,  and  Germany 
lead  in  this  important  industry  as  m  industrial  develop- 
ment m  general.  Canada,  on  the  other  hand,  ^hich  has  not 
progressed  until  recently,  is  far  behind  her  neighbor,  the 
United  States,  m  the  development  of  her  iron  and  steel 
industry.  Hence  it  is  that  a  study  of  the  economic  history 
of  the  Canadian  iron  and  steel  industry  ought  to  contribute 
very  largely  to  the  understanding  of  the  general  economic 
history  of  Canada. 

In  order  to  understand  the  history  of  a  particular  indus- 
try, it  is  necessary  to  know  something  of  the  general  eco- 
nomic background  m  the  various  periods  of  its  history. 
This  is  especially  true  in  the  case  of  the  iron  and  steel 


4    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

industry,  which  is  frequently  spoken  of  as  a  barometer  of 
general  trade  conditions;  an  expression  obviously  implying 
that  its  developments  and  periods  of  prosperity  or  depres- 
sion are  largely  determined  by  the  general  industrial  con- 
dition of  the  coimtry.  It  is  evident,  therefore,  that  some 
knowledge  of  the  background  of  Canadian  industrial  his- 
tory and  the  forces  hastening  or  retarding  the  country's 
economic  development  will  be  essential  to  an  understanding 
of  our  subject. 

Furthermore,  the  iron  and  steel  industry  cannot  prosper 
without  the  advantages  of  favorable  natural  conditions  for 
the  supply  of  raw  materials.  Coal,  ore,  and  fluxing  mate- 
rials must  be  obtainable  so  that  they  may  be  cheaply 
assembled  at  or  near  the  market  for  iron  and  steel.  It  thus 
becomes  necessary  to  add  to  our  background  of  industrial 
history  a  survey  of  the  natural  resources  in  Canada  and  the 
conditions  under  which  they  have  been  available. 

To  determine  what  part  protection  has  had  in  the  devel- 
opment of  the  Canadian  iron  and  steel  industry  is  a  second 
purpose  of  our  study,  but  in  this,  also,  the  background  is 
essential,  for  the  application  of  the  national  policy  of  pro- 
tection to  th<'  iron  and  steel  industry  reflects  general  eco- 
nomic conditions.  For  these  reasons,  then.  Part  One  of  our 
study  treats  of  the  various  factors  in  the  industrial  develop- 
ment of  Canada  in  different  periods,  together  with  the 
natural  resources  of  the  Canadian  iron  and  steel  industry. 

§  2.  Canada  has  not  yet  undergone  a  great  expansion  of 
industry  commensurate  with  that  found  in  the  United 
States.  Indeed,  a  prominent  feature  of  Canadian  history  is 
the  relative  lateness  of  the  country's  economic  develop- 
ment as  compared  ^ith  that  of  her  southern  neighbor. 
While  the  population  of  the  United  States  was  rapidly 
increasing,  that  of  Canada  long  remained  almost  station- 
ary. The  expansion  of  railway  systems  in  western  Canada 
is  coming  from  three  to  five  decades  later  than  it  did  in 


Timr  mrnfiMTi 


THE  INDUSTRIAL  DEVELOPMLNT  OF  CANADA    5 

southern  latitudes.  In  many  other  respects,  the  United 
States  has  progressed  much  more  rapidly  than  Canada. 
This  is  true  of  manufactures  and  of  the  manufacture  of 
iron  and  steel  in  particular. 

In  Canada,  however,  since  Confederation,  and  especially 
since  1897  or  1900,  wonderful  progress  has  been  achieved. 
Compared  with  economic  organization  in  the  French 
•'Rime,  which  lasted  until  1760,  and  in  the  provincial 
period  which  lasted  until  Confederation  in  1867,  the  eco- 
nomic life  of  the  last  twenty  or  thirty  years  of  the  nine- 
teenth century  and  diuring  the  twentieth  century  was 
marked  by  extraordinary  progress.  The  conditions  and 
factors  of  the  economic  life  of  these  four  main  periods  of 
Canadian  history  will  now  receive  our  attention. 


§  S.  In  the  period  of  French  control,  which  lasted  until 
1760,  is  found  a  typical  mercantile  colonial  policy  degen- 
erated into  colonial  misgovemment.  Colonization  was 
almost  a  failure.  Trading  companies  purchased  the  exclu- 
sive privileges  of  the  fur  trade  with  promises  of  settlement 
and  colonization,  which  were  if  possible  entirely  disregarded 
and  were  in  any  case  rarely  properly  carried  out.  Fishing 
and  the  fur  trade,  which  received  chief  attention,  did  n* 
require  permanent  economic  organization.  Agriculture 
lagged  under  a  seigneurial  system  transported  from  France. 
Industry  was  practically  undeveloped,  and  colonial  trading 
and  commerce  were  entirely  subservient  to  French  trading 
interests.  The  mother  country,  with  little  thought  of  the 
future,  regarded  New  Franc*,  its  natives  and  resources,  as 
a  legitimate  field  for  immediate  economic  exploitation. 
To  make  matters  worse,  the  administrators  were  often 
ineflScient,  and  preyed  on  the  colonists  or  any  industrial 
undertaking,  such  as  the  Government  iron  forges,  to  fill 
their  own  private  coffers. 

The  results  of  French  colonization  methods  became  pain- 
fully obvious  after  the  Peace  of  Paris,  in  1763,  when 


6    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

Canada  passed  finally  into  the  hands  of  the  British.  Many 
of  the  French  noblesse  moved  back  to  the  homeland,  leaving 
in  Canada  only  the  Imbitards,  vAth  their  primitive  social 
customs  lack  of  initiative,  poor  educational  system,  and 
restricted  local  interests;  conditions  which  even  to-day  are 
bemg  modified  only  slowly. 

K  '^^^f!  disadvantages  of  the  French  colonial  policy  must 
be  added  the  climatic  conditions  of  Canada,  which  have 
probably  retarded  the  development  of  the  country  more 
than  any  other  single  factor.    As  the  isothermal  lines 
roughly  follow  the  southern  shores  of  the  Great  Lakes 
what  IS  now  Ontario  is  almost  as  cold  as  the  most  northerly 
hmits  of  the  United  States.   Furthermore,  the  rivers  and 
lakes,  which  were  an  important  means  of  transportation  in 
early  years,  were  useless  for  five  or  six  months  of  the  year 
The  ice  on  the  St.  Lawrence  River,  which  was  the  sole  out- 
let for  the  produce  of  Canada  during  the  French  regime, 
closed  navigation  for  a  great  part  of  the  year.   It  is  easy, 
then,  to  understand  how  the  settlement  of  territory  now 
comprising  Ontario  was  so  handicapped  as  to  be  prac- 
tK-aUy  mipossible  during  the  French  regime. 

It  is  not  surprising,  therefore,  that,  when  in  1763  England 
secured  control  of  the  French  colonies  in  America,  the  pop- 
ulation  of  Canada  was  less  than  70,000  as  compared  with  a 
population  of  over  3,000,000  in  the  English-speaking  colo- 
nies  to  ,.ne  south.'  Industry  and  agriculture  were  carried 
on  under  most  unfavorable  circumstances,  and  trade  was 
conducted  under  a  system  of  exploitation  by  trading 
companies  authorized  by  the  mother  countiy. 

§  4.  Unfortunately,  the  transition  to  British  control 
failed,  m  many  respects,  to  bring  with  it  immediate  redress 
\  "^ir^^^t^^^ '"  *^^  provincial  period  dating  from  1760 
to  1807.  The  history  of  this  period  differs  from  the  French 

PoDltion^'"]'*"^'?'  'I'^l-  ^T'^  '^"'^  Distribution  of  the  Canadian 
ropulation.    JouTfud  of  Political  Ecormmy.  vol.  xxx,  p  S87.      ^^^"" 


THE  INDUSTRIAL  DEVELOPMENT  OF  CANADA    7 

regime  largely  in  that  trade,  commerce,  and  commercial 
policy  were  linked  with  British  rather  than  French  insti- 
tutions at  a  time  when  British  industrial  supremacy  was 
rapidly  gaining  ground.    It  was  provincial  in  that  each 
Province  controlled  its  own  affairs  subject  to  the  approval 
of  the  British  Parliament.  Upper  anj  Lower  Canada » were 
given  separate  political  institutions.   Acadia,"  secured  by 
England  in  1713,  had  its  own  separate  political  and  eco- 
nomic life.    Whereas   the  Federal   Government  of  the 
United  States  was  able  to  develop  some  uniformity  of 
economic  policy  according  to  methods  prescribed  by  the 
Constitution,  it  was  not  until  the  passing  of  the  Act  of 
Union,  in  1841,  that  any  unity  of  action  and  interest  was 
made  possible  in  Canada,  and  what  was  secured  at  that 
time  applied  only  to  the  two  Provinces  of  Upper  and  Lower 
Canada.   Even  then,  provincial  interests  were  often  pre- 
dominant.  The  larger  national  point  of  view  was  forgotten 
in  the  heat  of  party  strife  or  checked  by  the  conservatism 
of  the  French-Canadian  element. 

Connected  with  the  provincial  and  local  spirit  of  these 
early  days  was  the  Canadian  race  question,  which  is  still 
an  important  factor  in  Canadian  life  and  politics.  The 
great  body  of  the  population  of  Quebec  is  composed  of 
people  different  from  the  rest  of  the  Canadians  in  blood 
and  temperament,  in  language  and  customs,  in  religion  and 
education,  and  in  ideals  and  traditions.  This  was  one  reason 
for  givmg  Upper  and  Lower  Canada  different  political  insti- 
tutions;  but,  even  after  the  Act  of  Union,  the  race  question 
so  permeated  the  political  world  as  to  unfit  legislators' 
mmds  for  calm  and  unprejudiced  consideration  of  the  more 
fundamental  questions  of  the  economic  development  of  the 
country.  The  French-Canadian  element  more  than  once 
prevented  the  passing  of  legislation  which  would  have 
aided  the  advancement  of  the  English  Province.  For  in- 
stance, as  late  as  1865,  the  deepening  and  improvement  of 
'  Now  Ontario  and  Quebec.  «  Now  the  Marilime  Provinces. 


8    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

the  Lachine  Canals  on  the  Upper  St.  Lawrence  was  opposed 
because  it  was  calculated  to  benefit  Upper  rather  than 
Lower  Canada.^ 

The  geographical  features  of  the  country,  too,  had  much 
to  do  with  the  political  and  economic  development  of 
Canada.  The  Maritime  Provinces  were,  and  still  are,  shut 
otf  from  the  Central  Provincts  by  the  projection  of  New 
Eng'and  into  what  would  naturally  seem  Canadian  terri- 
tory. As  this  disadvantage  still  exists,  the  Maritime 
Provinces  have  retained  a  certam  feeling  of  isolation,  nnd 
the  Central  and  Western  Provinces  have  an  unfortunate 
lack  of  interest  in  the  Eastern  Provinces.  Upper  Canada, 
now  Ontario,  extending  as  it  did  south  and  west  into  the 
northern  part  of  the  United  States,  was  partially  shut  oflF 
from  the  foreign  trade  by  a  combination  of  misfortunes. 
The  exportation  of  her  produce  to  the  growing  market  in 
the  North  Central  States  was  limited  by  the  various  tariflFs 
imposed  from  time  to  time  by  the  United  States  Govern- 
ment. Forced  thus  to  turn  eastward  for  an  outlet  for  her 
produce,  the  disadvantage  of  distance  from  European 
markets  was  augmented  by  the  fact  that  her  products 
were  for  several  month::!  of  every  year  closed  in  by  the  ice 
of  the  St.  Lawrence  and  the  Great  Lakes.  Lower  Canada, 
on  the  other  hand,  -vas  w  a  {)osition  to  control  the  export 
and  import  trade,  and  it  exercised  this  power  to  the  extent 
of  making  a  bargam  by  whicli,  according  to  the  Act  of 
Union,  it  paid  to  Upper  Canada  only  a  small  portion  of  the 
customs  duties,  and  thus  virtually  pkced  a  toll  on  the 
production  and  consumption  of  Uj-per  Canada. 

Likewise,  the  westward  movement,  which  played  such 
an  important  r61e  in  the  development  of  the  United  States 
from  the  War  of  1812  to  recent  years,  was  long  retarded  in 
Canada  by  geographical  conditions.  In  the  earlier  years, 
the  natural  route  of  western  migration  was  along  the  water- 

'  G.  V.  Cousins,  "Early  Transportation  in  Canada,"  Univertily  Maga- 
zine,  December,  1907,  p.  507. 


THE  INDUSTRIAL  DEVELOPMENT  OF  CANADA    9 

ways.  In  Canada  it  followed  the  northern  shores  of  Lakes 
Ontario  and  Erie.  When  the  western  movement  in  the 
United  States  was  reaching  the  Mississippi  Valley,  Ca- 
nadian migration,  instead  of  following  the  northern  shores 
of  Lakes  Huron  and  Superior,  moved  through  Michigan 
into  the  United  States  and  thus  helped  in  the  building-up 
of  the  great  American  West. 

Doubtless  this  movement  of  population  was  affected  by 
the  climatic  condition  of  the  country.  The  rigor  of  the 
Canadi  a  winter  was  sufficient  to  drive  the  majority  of 
European  emigrants  to  the  United  States  where  opportuni- 
ties were  quite  as  great  as  in  Canada  and  the  results  obtain- 
abk  with  less  sacrifice.  Indeed,  for  a  long  period  there  was 
a  constant  drain  on  the  population  of  Canada  through  the 
emigration  of  many  people  co  what  seemed  a  country  of 
greater  and  more  immediate  opportunity. 

The  potential  agricultural,  mmeral,  and  forest  wealth  of 
a  country  cannot  be  exploited  until  adequate  transporta- 
tion is  available,  and  Canada  was  not  oversupplied  with 
this  important  asset.  Here  agaijj,  geographical  features 
and  climatic  conditions  were  important.  Canada  hr.s  of 
course,  an  abundance  of  waterways,  which  are  a  great  nat- 
ural advantage  when  properly  improved  and  used.  Since 
Hahfax  and  St.  John,  which  have  excellent  harbors,  were 
too  far  distant  from  Ontario  to  provide  an  outlet  for  bulky 
produce,  especially  during  the  pre-railway  era,  the  St. 
Lawrence  River  became  the  main  outlet  for  Ontario's 
products.  Nature,  however,  placed  many  obstacles  in  the 
way  of  navigation  on  the  St.  Lawrence,  and  these  had  to 
b-  overcome  by  the  expenditure  of  many  niillions  of  dol- 
lars. To  put  Montreal  at  the  head  of  navigation  was  no 
small  task.  As  the  St.  Lawrence  was  rxtremely  shallow  at 
many  points  between  Quebec  and  Montreal,  vessels  draw- 
ing more  than  ten  or  twelve  feet  of  water  were  unable  to 
reach  Montreal  during  a  large  part  of  the  navigation  sea- 
son.   As  early  as  1826  the  Jeepenmg  of  the  channel 


I 

ISl 

'4 


10    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

was  prcjiosed,  but  dredging  operations  were  not  started 
until  eighteen  years  later.  Besides  these  river  improve- 
ments, it  was  necessary  to  build  canals  to  provide  a  route 
by  which  the  falls  at  Niagara  and  the  rapids  of  the  Upper 
St.  Lawrence  River  might  be  avoided.  Even  with  these 
improvements  the  results  were  only  partially  satisfactory, 
for  during  the  winter  months  the  St.  Lawrence  was  ice- 
bound and  traflic  was  forced  into  other  channels.  In  the 
mean  time,  however,  the  Erie  Canal  and  the  railways  of 
the  Eastern  States  hr.d  attracted  to  New  York  the  great 
bulk  of  the  traffic  from  Canada  to  Europe. 

Since  water  transportation  was  restricted  to  the  open 
months,  railway  and  other  land  transportation  facilities 
were  most  important  for  internal  development.  A  study 
of  rates  in  force  before  the  railway  era  reveals  the  meffi- 
ciency  of  the  facilities  provided.  Before  1812,  when  it  cost 
$7  to  ship  a  ton  of  freight  from  Liverpool  to  Montreal,  the 
rates  from  Montreal  to  the  upper  end  of  Lake  Ontario 
varied  from  $20  to  $27  a  ton.  High  rates,  of  course,  pre- 
vented the  movement  of  traffic,  and  thus  retarded  the 
economic  development  of  the  country.' 

The  condition  of  roads  m  Canada  was  deplorable;  and, 
in  1770,  Carleton,  the  Governor,  was  compelled  to  enforce 
the  individual  responsibility  of  proprietors  and  tenants  to 
keep  the  post  roads  in  repair.  Owing  to  the  resistance  of 
the  French-Canadians  to  enforced  labor,  it  was  not  until 
Sydenham's  time,  from  1889  to  1841,  that  much  improve- 
ment was  effected.  Since  the  Canadian  winter  with  its 
frost  and  snow  gave  a  firm,  smooth  road  for  heavy  loads, 
winter  roads  were  very  important.  For  many  years  they 
were  used  almost  exclusively  for  all  traffic  that  could  not 
be  shipped  by  water  during  the  season  of  navigation.  Cor- 
duroy roads  and  turnpikes  were  common,  but  the  corduroy 
roads,  at  their  best  a  wretched  means  of  transportation, 
were  usually  in  a  poor  state  of  rppair.  In  Upper  Canada, 

•  Cousins,  op.  eit,  p.  611. 


THE  INDUSTRIAL  DEVELOPMENT  OF  CANADA    11 

especially,  the  turnpikes  were  controlled  by  joint-stock 
companies  which  not  only  charged  excessive  tolls,  but  failed 
to  keep  the  roads  in  good  condition.  Later,  the  Govern- 
ment took  charge  of  this  public  service,  maintainmg  its 
control  until  1841,  when  it  seemed  advisable  to  place  the 
roads  under  the  control  of  the  municipalities.' 

The  value  of  the  railway  was  not  quickly  realized  in 
Canada,  for  it  was  expected  that  waterways  would  be 
sufficient  for  internal  transportation.  Consequently,  enor- 
mous sums  of  money  were  expended  on  canals,  even  after 
1840,  when  the  superiority  of  the  railroad  had  already 
been  proved  m  England  and  in  the  United  States.  Can- 
ada's delay  in  adopting  the  railway  was,  of  course,  partly 
due  to  the  fact  that  traffic  was  limited  in  amount,  and 
partly  due  to  the  fact  that  waterways  did  supply  a  great 
deal  of  the  demand.  Yet,  even  after  the  value  of  the  rail- 
way was  recognized  and  railway  construction  had  begim, 
geographical  features  deterred  rapid  expansion  of  the  rail- 
way net.  The  forbidding  nature  of  the  country  to  the  north 
of  Lakes  Huron  and  Superior  for  many  years  proved  a 
barrier  to  transportation  to  the  west.  The  rocks  and  for- 
ests of  the  Ontario  highlands  and  of  the  Rocky  Mountains 
were  obstacles  greater  than  railway  building  was  at  that 
time  willmg  to  surmount.  Furthermore,  this  section  of  the 
country  did  not  offer  any  prospects  of  a  profitable  traffic  in 
the  immediate  future.  While  the  Grand  Trunk,  with  both 
terminals  in  the  United  States,  reached  Chicago  in  the 
early  seventies,  the  building  of  a  national  transcontinental 
railway  in  Canada  was  only  a  mooted  question,  until  in 
the  eighties  British  Columbia's  unqualified  demands  for  a 
railway  to  unite  her  to  the  Eastern  and  Western  P   vinces 
forced  the  building,  at  whatever  cost,  of  the  Canadian 
Pacific  Railroad. 

Other  conditions,  too,  were  backward.    Agricultural 
methods  we.e,  of  course,  primitive,  especially  m  Quebec, 

'  CousinS;  0-    ->,,  pp.  613-15. 


I' 


12    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

where  the  French  clung  to  old  methods.   It  is  scarcely 
necessary  to  add  that  the  climate  limited  the  agricultural 
area,  and  prevented  the  culture  of  certam  kmds  of  produce. 
The  clunate  of  the  Northland  together  with  geographical 
features  prevented  the  development  of  agriculture  in  West- 
em  Canada.  Had  Western  Canada  been  able  to  ship  prod- 
uce to  England  via  Hudson's  Bay,  Canadian  economic  de- 
velopment might  have  been  very  different,  and  Hudson's 
Bay  might  have  been  for  Canada  what  the  Gulf  of  Mexico 
and  the  Mississippi  River  were  to  the  United  States  before 
1860.   The  repeal  of  the  Com  Laws  by  Great  Britain  in 
1846  to  1849,  and  the  consequent  loss  of  the  preference  that 
Great  Britain  had  given  colonial  products,  led  to  special 
difficulties  and  resulted  in  serious  economic  depression, 
followed  by  talk  of  annexation  to  the  United  States.  The 
passage  of  the  Elgin-Marcy  Reciprocity  Treaty  m  1854, 
under  which  Canadian  natural  products  for  a  time  found 
a  free  market  in  the  United  States,  relieved  this  situation 
both  politically  and  economically  untU  practically  the  end 
of  the  provincial  period. 

Manufacturing  industry  did  not  make  great  advances 
throughout  this  provincial  period.   The  tariff  was  never 
high  enough  to  give  an  extraordinary  stimulus  to  manu- 
facturing, and  oth«r  Imes  of  endeavor  clearly  offered  more 
attractive  and  sure  returns.  It  cannot  be  denied,  of  course, 
that  Canada  made  some  progress.  Between  1763  and  1791 
about  30,000  United  Empire  Loyalists  had  settled  in  the 
country.  In  1790,  Quebec  had  a  population  of  over  160,000. 
By  1851,  Quebec  had  a  population  of  890,000  and  Ontario 
of  952,000;  by  1871,  the  population  of  the  two  Provinces 
had  increased  to  1,912,000  and  1,621,000  respectively.* 
Great  Britain  colonized  her  new  territory  with  a  great 
influx  of  English,  Irish,  and  Scotch,  and  Quebec  grew  in 
numbers  by  reason  of  immigration  and  the  remarkable 
mcrease  of  the  native  population.  As  we  have  already  seen, 
>  Donald,  op.  cit.,  pp.  897-98. 


Wi^M 


THE  INDUSTRIAL  DEVELOPMENT  OF  CANADA    IS 

the  system  of  roads  was  gradually  extended;  several  canals 
were  built,  waterways  were  generally  improved  from  time 
to  time,  and  railroads  were  introduced  so  that  there  were 
4800  miles  in  operation  in  1875. »  By  1868,  Canada's  aggre- 
gate trade  amounted  to  $131,000,000.*  Nevertheless,  eco- 
nomic development  was  slow  and  irregular  and,  one  may 
well  add,  provincial,  in  view  of  the  influence  of  geographi- 
cal and  climatic  conditions,  the  lack  of  adequate  transpor- 
tation facilities,  and  the  movement  of  population  through 
and  from  Canada  to  the  United  States. 

§  5.  Finally,  by  the  British  North  America  Act  of  1867, 
a  union  of  practically  all  British  territory  m  North  America 
was  consummated,  and  to  some  extent  provincial  interests 
in  economic  questions  were  subordinated  to  a  larger  na- 
tional point  of  view.  Political  union  did  not,  however, 
improve  the  economic  situation  at  once.  In  fact,  a  period 
of  depression  followed  the  repeal  of  the  Reciprocity  Act  in 
1866,  and  after  a  few  brief  years  of  prosperity,  from  1869 
to  1872,  the  financial  depression  of  the  seventies  set  in. 
This,  with  other  depressions  in  the  early  eighties  and  in  the 
nineties,  made  the  whole  period  from  1867  to  1897  an  era 
of  trial. 

Throughout  the  period  of  Confederation  the  develop- 
ment of  Canada  was  greatly  hampered  by  the  tariff  wall 
set  up  between  Canada  and  the  United  States.  After  the 
Civil  War  the  rates  of  duty  on  most  goods  entering  the 
United  States  were  higher  than  ever  before,  and  in  1879 
Canada  herself  adopted  the  "National  Policy  of  Protec- 
tion." As  a  result  of  these  artificial  restrictions,  both  coun- 
tries lost  the  advantages  of  international  trade,  but  the 
Canadian  producers  of  raw  materials  suffered  more  than 
the  American  producers  through  iuability  to  secure  as  large 
a  market  as  they  needed.  In  other  instances,  the  Canadian 
tariff  so  raised  the  prices  of  manufactured  articles  that  en- 

»  Canada  Year-Book,  191S,  p.  443.  «  Ibid.,  p.  227. 


14    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

ter  into  the  manufacture  of  other  products  as  to  impede  the 
exploitation  of  Canada's  natural  resources.  While  the  Ca- 
nadian tariff  undoubtedly  encouraged  the  introduction  of 
many  Canadian  manufacturing  industries,  yet  it  certainly 
was  a  great  burden  on  Canada's  extractive  industries.  The 
high  cost  of  machinery  was  a  particularly  important  case 
of  this  effect  of  the  high  tariff.  Since  very  little  machinery 
has  been  made  in  Canada  until  recently,  a  protective  tariff 
in  most  mstances  enormously  increased  the  cost  of  securmg 
up-to-date  machines.  It  is  notorious  that,  in  many  cases, 
the  machinery  In  use  in  Canada  was  several  years  behind 
current  inventions.  The  tariff  on  agricultural  unplements 
has  always  been  a  special  grievance  to  the  farmers.  In  fact, 
this  is  so  true  that  the  manufacturers  of  unplements  mam- 
tain  that,  whenever  adverse  criticism  of  the  tariff  arises, 
they  have  to  bear  the  chief  burden  of  tariff  reductions.  For 
a  Jong  time  this  burden  appUed  also  to  mining  operations, 
until,  in  1907,  certain  machinery  entering  Canada  for  use 
in  mining  was  placed  on  the  free  list.  There  seems  to  be 
8ome  basis,  then,  for  the  statement  that  the  tariff  on  ma- 
chinery was  a  far  greater  brrden  on  the  purchasers  than 
the  benefit  to  the  producers  of  this  protected  list  of  com- 
modities  warranted.^ 

Canada  suffered,  too,  from  the  lack  of  certam  agents  of 
production.  Most  important  was  the  lack  of  capital.  For 
some  reason  or  other,  Canadians  themselves  preferred  the 
chimney-piece  as  the  repository  of  their  hard-earned  gains. 
British  investors  long  remained  cautious  about  investing  in 
Canada.  British  disappointment  in  the  value  of  the  secu- 
rities of  the  Grand  Trunk  Ra'Jway  was  for  a  protracted 
period  a  great  blow  to  Canada's  borrowing  power.  Mean- 
while, Great  Britain  had  ample  opportunity  to  invest  else- 
where, especially  in  the  United  States.  For  many  years 
American  capital,  which  to-day  is  undertaking  a  very  large 

I  "The  Tndustrial  Development  of  Canada."  American  Machinist  vol. 
TXiv,  p.  905. 


TS.. 


'^'::^>J-^ 


TJ 


THE  INDUSTRIAL  DEVELOPMENT  OF  CANADA    15 

part  of  the   task  of  developing  Canadian  manufactur- 
ing industry,  found  sufficient  opportunities  at  home,  and 
Canada  was  ignored.  Of  course,  this  lack  of  capital  may  be 
partly  explained  by  the  fact  that  for  a  long  time  Canada 
herself  offered  little  or  no  encouragement  to  industry.  The 
Canadian  home  market  was  not  large  enough  to  support 
any  large  establishment,  and  the  manufacturers'  tariff- 
aided  rivals  in  the  United  States  were  able  to  supply  the 
Canadian  market  at  rates  which  prevented  the  investment 
in  Canada  of  American,  British,  and  domestic  capital. 
Again,  the  lack  of  coal  in  close  proximity  to  manufacturing 
centers  was  a  retarding  factor.  While  water  power  is  found 
in  abundance,  and  is  now  minimizing  the  importance  of  this 
deficiency,  in  the  nineteenth  century  this  was  of  relatively 
little  value  in  the  nation's  industrial  progress.    Conse- 
quently, during  this  period,  when  close  proximity  of  coal 
to  iron  ores  was  an  essential  conditiou  for  the  development 
of  the  iron  and  steel  industry,  Canada  was  at  a  distinct 
disadvantage. 

Geographical  features  still  restrained  the  westward  move- 
ment and  the  building  of  transcontinental  railways.  As 
Lakes  Winnipeg  and  Manitoba  stretched  themselves  one 
hundred  miles  north  and  south  only  a  short  distance  from 
the  American  border,  all  transcontinental  railways  were 
forced  to  round  the  southern  end  of  these  lakes,  and  as  a 
result  only  the  southern  border  of  Canada  was  developed. 
Only  in  the  last  few  years  has  the  fact  been  recognized  that 
the  Northland  is  to  play  an  important  role  in  western  devel- 
opment. 

Nevertheless  a  certain  amount  of  progress  was  made. 
The  building  of  the  Intercolonial  Railway  in  the  seventies 
and  of  the  Canadian  Pacific  in  the  eighties  brought  a 
greater  unity  of  economic  relations  by  joining  the  Mari- 
time, Central,  and  Western  Provinces  and  districts  and 
thus  somewhat  counteracted  the  retarding  influence  of  the 
geographicid  characteristics  of  Canada.   Railway  mileage 


16    THE  C.\NADIAN  IRON  AND  STEEL  INDUSTRY 

increased  from  2278  miles  in  1867  to  b858  miles  in  1879  and 
16,550  miles  in  1897.'    The  granting  of  subsidies  to  the 
Canadian  Pacific  and  the  building  of  the  Intercolonial 
Railway  by  the  Goveroment  involved  heavy  expenditures, 
and  even  the  Liberal  Party,  despite  its  opposition  to  high 
protection,  was  forced  in  1874  to  impose  higher  duties  on 
imports.   Then,  in  1879,  the  national  policy  of  protection 
was  put  into  operation  by  the  Conservative  Party,  which 
extended  it-  application  from  time  to  time  to  an  increasing 
number  of  growing  industries.  Under  the  influence  of  pro- 
tection and  the  building  of  Canadian  railways  considerable 
progress  was  made  in  manufacturing,  but  only  to  supply 
the  Canadian  market.   The  population  grew  from  about 
3,000,000  to  5,000,000,  and  Canada's  aggregate  externa! 
trade  grew  from  $131,000,000  in  1868  to  $300,000,000  in 
1897.«  Occasional  pe   ods  of  real  prosperity  brightened  the 
general  era  of  difficulty.    Nevertheless,  it  has  to  be  ad- 
mitted that  the  success  of  Confederation  was  political 
rather  than  economic,  and  that,  untU  just  before  the  begin- 
ling  of  the  twentieth  century,  Canada  did  not  seem  to 
have  the  prospect  of  any  great  economic  future. 

§  6.  In  the  recent  era  of  prosperity  which  the  future  will 
date  roughly  from  1900,  a  remarkable  expansion  of  industry 
and  agriculture  and  an  extraordinary  increase  of  popula- 
tion have  come  to  Canada.  The  Government,  by  means  of 
a  vigorous  encouragement  of  immigration,  has  brought 
many  settlers  to  the  Dominion,  and  a  lenient  and  progres- 
sive land  policy  has  made  the  Canadian  West  the  land  of 
opportunity  for  those  who  will,  for  a  few  years,  brave  the 
difficulties  and  trials  of  a  pioneer  life.  An  increase  of  raU- 
way  mileage  from  16,550  miles  in  1897  to  29,304  miles  in 
1913  has  opened  up '  new  areas  for  agricultural  production 
and  an  agricultural  population,  and  has  resulted  in  employ- 
ment for  many  people  in  construction  work  of  various 

>  Canada  Year-Book.  1913,  p.  443.      «  Ibid.,  p.  228.      »  Ihid.,  p.  443 


m:im- 


THE  INDUSTRIAL  DEVELOPMENT  OF  CANADA    17 

kinds  on  the  frontier  and  in  the  manufacturing  cities.  Not 
only  has  the  emigration  to  the  United  States  been  checked 
but  the  Ude  has  actually  turned  in  the  other  direction.' 
Canada*.?  population  increased  to  7,800,000  in  1910  »  and 
probably  has  mounted  to  over  8,000,000  in  1914.  The  cli- 
mate has  no\  prevented  the  desirable  immigration  in  the 
last  few  decades.  While  it  tends  to  exclude  the  less  desir- 
able southern  Europeans,  it  presents  no  terrors  to  the 
hardy  races  of  northern  Europe.   Moreover,  it  has  given 
the  Canadian  people  the  vigor  and  energy  necessary  for  the 
task  of  developing  the  opportunities  at  hand.    Scientific 
uivestigation  has  shown  that  climatic  conditions  are  not 
an  impassable  barrier  to  many  important  branches  of  agri- 
culture and,  in  fact,  are  an  advantage  in  the  production  of 
hardy  varieties  of  certain  grains.    While  the  climate  will 
always  present  certain  difficulties,  these  will  henceforth 
retard  Canadian  development  less  than  in  the  past. 

As  we  have  already  seen,  Confede.ation  largely  destroyed 
the  provmcial  spirit  of  the  pre-Confederation  era,  and  whUe 
there  is  still  and  probably  always  will  be  evidence  of  pw- 
tial  local  mterest,  nevertheless,  the  vision  of  the  broader 
national  interests  is  more  widespread.    This  is,  of  course, 
a  natural  result,  not  only  of  Confederation,  but  also  of  the 
growth  of  agencies  of  communication  and  transportation. 
Economically.  Canada,  with  her  system  of  railwavs  run- 
mng  east  and  west  across  the  continent,  is  more  of  a  unit 
than  ever  before,  and  the  disadvantages  of  geographical 
features  are  bemg  overcome  as  rapidly  as  is  good  for  so 
young  a  nation.  This  growth  has  necessitated  the  invest- 
ment of  much  Canadian,  and  of  British,  American,  French, 
and  other  foreign  capital,  which  now  finds  in  Canada  an 
unexampled  field  to  exploit.   In  fact,  the  most  important 
question  IS  whether  Canada  has  not  been  borrowing  too 
r^pidiy.  The  lack  of  coal  in  Ontario,  while  stUl  a  disadvan- 
tage, IS  bc^g  gradually  overcome  by  the  use  of  unrivaled 
'  Donald,  op.  cit.,  p.  306. 


18    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

water  power  and  the  electricity  derived  therefrom.  The 
tariff  on  many  lines  of  machinery  has  been  withdrawn  or 
reduced,  to  the  advantage  of  extractive  and  other  indus- 
tries, and,  while  Canada  rejected  the  Reciprocity  proposals 
of  1911.  the  j)artial  withdrawal  of  the  United  States  from 
the  world  markets  in  raw  products,  especially  hard  grains, 
timber,  and  minerals,  together  with  the  reduction  of  the 
American  tariff  on  many  articles  and  the  increased  home 
market,  has  opened  a  new  cnportunity  for  Canadian  ex- 
tractive industries.  The  building  of  railways  and  other 
construct 'on  work  of  the  last  two  decades  and  the  increase 
of  the  population  have  provided  Canadian  manufacturers 
with  a  larger  market,  somewhat  curtailed,  it  is  true,  by  the 
importation  of  the  products  of  American  tariff-fed  manu- 
facturing industries.  Ample  proof  of  Canada's  recent  pros- 
perity lies  in  the  fact  that,  besides  her  domestic  trade, 
Canada's  exports  increased  from  $137,000,000  in  1897  to 
$479,000,000  in  1914;  her  imports  increased  from  $119,- 
000.000  in  1897  to  $650,000,000  in  1914;  and  her  aggregate 
external  trade,  from  $257,000,000  in  1897  to  $1,130,000,000 
in  1914.^  In  short,  in  the  last  two  decades,  Canada  has 
been  ushered  into  an  era  of  remarkable  material  prosperity. 

§  7.  As  we  have  already  suggested,  the  history  of  the 
Canadian  iron  and  iteel  industry  is  necessarily  woven  into 
the  web  of  general  industrial  conditions.  For  many  years  it 
struggled  on  ir  spite  of  the  backward  condition  of  the 
country.  Many  ^vpre  the  failures  that  overtook  early  enter- 
prises. The  last  decade,  however,  has  seen  an  enormous 
development  of  this  special  industry  as  of  Canadian  indus- 
try in  general.  The  development  of  transportation  facili- 
ties has  opened  up  new  markets  by  building  up  a  rapidly 
increasing  demand  in  the  West.  Railway  construction  has 
itself  caused  a  direct  demand  for  steel  rails  bridge  materi- 
als, car  wheels,  and  other  iron  and  steel  products.  Building 
»  Canada  Year-Book,  1913,  p.  228. 


THE  INDUSTRIAL  DEVELOPMENT  OF  CANADA    19 

operations  have  been  calling  for  a  larger  output  of  struc- 
tural steel.  Tl.e  expansion  of  agriculture  has  created  a  new 
demand  for  steel  entering  into  the  manufacture  of  agricul- 
tural implements,  wire  fencing,  and  tools.  Immigration  is 
supplying  the  labor  force  previously  inadequate  for  any 
large  industrial  enterprise.  Last,  but  not  least,  the  growth 
of  the  country  has  resulted  in  the  discovery  of  unknown 
deposits  of  raw  materials,  chief  among  them  coal  and  iron 
ore,  on  which  the  industry  we  are  considering  depends. 


CHAPTER  II 

NATURAL    RESOURCES    OF    THE    CANADIAN    IRON    AND 
STEEL   INDUSTRY  ^ 

§  1.  While,  as  we  have  seen,  the  industrial  development 
of  a  country  exercises  a  very  important  influence  on  its 
iron  and  steel  industry,  yet  this  influence  is  qualified  and 
hm.ted  by  the  nature  of  the  available  resources  and  the 
conditionsaffecting  the  assembling  and  useof  ore,  coal,  flux 
and  other  materials.  Before  considering  the  resources  and 
natural  conditions  of  the  Canadian  iron  and  steel  industry. 
It  IS  desirable  to  discuss  the  factors  influencing  the  devel- 
opment and  use  of  these  essentials. 

An  estimate  of  the  iron  supplies  of  a  country  must  in- 
elude  consideration  of  the  question  of  general  availability, 
and  this,  of  course,  in  solves  the  problem  of  the  relationship 
of  costs  and  prices.   If  ores  are  of  low  grade,  if  they  are 
difficult  to  mine,  if  they  are  far  distant  from  the  market  or 
from  fuel  and  fluxing  materials,  or  if  they  are  subject  to 
poor  or  costly  transportation,  their  immediate  utilization 
may  be  impracticable,  and  future  developments  must  be 
awaited.  On  the  other  hand,  if  the  demand  for  the  product 
IS  strong,  if  the  production  of  ore  Is  protected  by  an  ade- 
quate customs  duty,  or  if  the  market  of  a  neighboring  for- 
eign nation  ,s  a  large  and  open  one,  otherwise  unmarketable 
ores  may  be  profitably  mined. 

Of  fundamental  importance  in  the  availability  of  iron 
ores  IS  the  matter  of  costs.  Of  these,  the  most  important 
are  the  costs  of  mining  the  ore,  of  transportation  to  the 
furnace,  and  such  costs  of  reduction  as  arise  from  the 
nature  of  the  ore  itself. 


NATURAL  REgOURCES 


81 


§  2.  A  point  of  first  consif'^; v.  1 ''  ■a  'n  the  cost  of  ore  is  the 
nature  of  mining  condition  .  Indeed.  ;l:e  .:»st  of  raising  the 
ore  to  the  surface  may  pr  -hU/it  its  U'ili:  ation.  There  are 
limiting  depths  beyond  w  ji.M  tuiiiug,  jn  account  of  the 
amoimt  of  water  present,  may  became  altogether  too 
expensive.  Whereas  many  deposits  can  be  worked  cheaply 
in  open  pits  or  for  a  certr-in  distance  under  the  surface,  the 
cost  of  stripping  and  timbering  may  prevent  working  at 
greater  depths.  Another  kind  of  limiting  condition  arises 
from  the  fact  that  in  many  cases  hematites  are  mixed  with 
foreign  materials,  or  "gangue,"  from  which  the  ore  must 
be  separated  by  washing.  Similar  conditions  affect  the 
availability  of  many  deposits  of  magnetite,  except  that 
here  the  impurities,  often  other  minerals,  are  so  closely 
associated  with  the  iron  ore  that  they  must  be  separated 
by  magnetic  concentration.  Where  this  condition  exists, 
the  use  of  such  ores  depends,  of  course,  on  the  cost  of  the 
process  of  concentration  and  its  relation  to  competition 
with  alternative  sources  of  supply.^ 

§  3.  Of  great  importance  is  the  accessibility  of  ores;  the 
character  of  transportation  facilities  and  proximity  to  fuel. 
Naturally,  many  deposits  have  long  remained  undiscov- 
ered because  of  lack  of  means  of  transport  which  would 
have  stimulated  and  aided  prospecting.  Others  are  known 
to  exist  in  regions  so  remote  from  rail,  river,  or  canal  facili- 
ties and  from  fuel  supplies  that  they  may  be  considered 
unavailable  so  long  as  they  are  compelled  to  compete  with 
more  accessible  ores.  Yet  they  may  be  taken  into  account 
in  considering  total  reserves,  for  the  influence  of  accessi- 
bility is  only  relative,  and  no  deposit  wh'ch  is  suflBciently 
large  and  valuable  to  warrant  at  some  future  date  the 
expenditure  necessary  for  constructing  the  means  of  trans- 
portation can  be  regarded  as  permanently  unavailable.'' 

'  United  States  Geological  Survey,  1908,  Report  en  Mineral  Retoureet 
of  the  United  States,  p.  117. 
*  Ibid.,  p.  117. 


r    f 

11   ' 


22    THE  CAN.VDIAN  IRON  AXD  STEEL  INDUSTRY 

Allied  to  this  feature  is  the  problem  of  the  supply  of  coal 
and  the  distance  of  ores  from  fuel.  This  eondiUo/^ay  he 
a  more  serious  disadvantage  or  more  valuable  asset  than 
the  absence  or  presence  of  transport  service,  which  at  best 
IS  limited  m  power  economically  to  assemble  the  raw 
materials.  England  won  and  long  held  supremacy  in  steeZ 
makmg.  m  spite  of  the  x^lative  inferiority  of  her  iron  ore 
resources,  because  of  the  close  proximity  of  the  ores  to 
unsurpassed  supplies  of  fuel.  But  the  younger  indus^y  of 
he  United  States,  notwithstanding  the  handicap  of  a 
later  start  and  widely  divided  natural  resources  has  sur 
mounted  this  difficulty.  Cheap  water  and  rail" Lsporta-' 

ore  and  fue  .     Water  transportation  is  able  to  play  a  great 
par    m  making  possible  the  assembling  of  raw  mate^l 
hat  would  otherwise  be  commercially  separated.  Llnd 
for  instance  is  able  to  receive  by  water  the  high-grade  ores 
of  Bilboa,  Spain.   Nowhere  in  the     nited  Sf.f.r      i 
quantities  of  the  best  steel-making":!:'.'  IYL^I^ 
proximity  to  coal.    V.t  the  Great  Lakes  supply  a  „ 
o  transportation  which  has  made  possible  the^apidg^^^^^^^^ 
of  the  iron  and  steel  industiy  in  the  United  StLs  in    he 
last  twenty  years.  Indeed,  this  factor  has  had  much  to  do 

the  fact  that  the  most  noticeable  tendency  in  the  iron 
mdustiy  IS  to  use  ores  of  lower  average  content  T^" 
tendency  will  undoubtedly  continue  althe  moracclsr 
ble  portions  of  the  richer  deposits  are  worked  out  and  as 
technical  improvements  ai^  introduced.  The  decentrah 
nation  o   the  i^n  industiy  may  naturally  be  ^ZZt 

If ..t;I  vJxxi^rC"  "  '"°  ^"'  Steel-making."  En^neering 

Be™  ir'  ""  ''•"'  ^°«^^^^'  ""  ^'^^--'  but  the  ore  is  not  of 
'  J.  C.  Mills.  Our  Inland  Se<u.  p.  ij8. 


NATURAL  RESOURCES 


23 


follow  the  use  of  inferior  ores.  This  decrease  in  the  iron 
content  of  the  ore  used  involves  a  corresponding  increase 
in  the  cost  of  transporting  the  ore  per  unit  of  pig  iron 
produced.  This  can  be  partially  avoided  by  producing 
the  pig  iron  at  points  nearer  the  sourc.  of  the  ores.  This, 
in  turn,  will  involve  an  increase  in  the  proportion  of  fuel 
used  in  the  regions  producing  the  ore  and  an  increase  in  the 
cost  of  transporting  fuel  per  ton  of  pig  iron  produced.  *  But 
it  appears  already  that  the  increased  cost  of  transporting 
ores,  combined  with  expansion  of  markets  in  the  Northwest 
of  the  United  States  and  in  western  Canada,  has  encour- 
aged the  building  of  blast  furnaces  at  Duluth,  Sault  Ste. 
Marie,  and  at  Port  Arthur,  in  spite  of  the  higher  costs  of 
transporting  coal  per  unit  of  pig  iron  produced.  Without 
doubt  Canada  will  reap  the  benefit  of  such  a  tendency  by 
increased  use  of  her  ores  at  or  near  deposits. 

§  4,  In  addition  to  the  cost  of  mining  and  the  accessi- 
bility of  ores,  a  third  ft^otor  affecting  the  availability  of 
ores  is  the  character  of  the  ore  itself,  and  the  consequent 
effect  on  the  cost  of  production  of  iron.  The  content  of 
metallic  iron  in  ores  at  present  varies  from  35  to  15  per 
cent.  This  wide  variation  in  the  quality  of  the  ores  used 
is  due  in  part  to  the  presence  of  other  materials,  such  as 
lime,  which  might  make  the  ore  almost  self-fluxing  and 
permit  the  use  of  otherwise  useless  ores.  Some  ores  require 
roasting  to  eliminate  sulphur.  The  percentage  of  copper, 
chromium,  manganese,  and  especially  phosphorus,  affects 
seriously  the  method  and  cost  of  production  and  the  quality 
of  the  product. 

§  5.  Another  factor  touching  the  economic  availability 

of  iron  ores  is  the  nature  of  the  ownership  of  raw  materials, 

an  important  element  in  the  power  of  the  United  States 

Steel  Corporation.    When   a   large  company  controls  a 

'  United  States  Geological  Survey,  op.  eit.,  p.  118. 


,     1 


•?&  ::>st 


U    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

variety  of  ores  and  is  equipped  to  assemble  them,  and  to 
form  any  desired  mixture  of  grades,  it  may  use  with  advan- 
tage ores  which  could  not  be  used  by  a  small  company 
compelled  to  dispose  of  a  single  grade  of  product  and  kind 
of  ore  m  the  open  market.*  Furthermore,  a  company  con- 
troUmg  a  great  part  of  the  natural  resources  of  high  grade 
might  thereby  secure  virtual  monopoly  of  a  country's  iron 
and  steel  mdustry.  Admittedly,  the  greatest  factor  in  the 
strength  of  the  United  States  Steel  Corporation  is  its  prac- 
tical control  of  most  of  the  Bessemer  ores  of  commercial 
value  m  the  United  States. 

Owing  to  the  varving  importance  of  these  different  fac- 
to^.  the  future  advantage  in  the  availability  of  resources 
will  obviously  pass  from  old  to  new  districts,  or  at  least 
spread  to  include  new  areas  of  supply.   Notwithstanding 
the  mcrease  in  the  cost  of  transportation  and  smelting  of 
ores,  per  umt  of  iron  produced,  lower  grades  of  ores  will  be 
called  upon  as  the  higher  grade  and  Bessemer  ores  of  the 
Lake  Superior  region  become  depleted.  Likewise  technical 
mprovements  may  completely  change  the  whole  situation, 
i^lectro-metallurgy.  which  is  as  yet  only  in  the  stage  of  the 
scientifically  possible,  may  become  economically  advan- 
tageous  The  extended  use  of  the  basic  open-hearth  system 
IS  providmg  an  increasing  market  for  many  hitherto  value- 
less ores    Most  important  Canadian  ore  deposits  are  best 
treated  by  this  process.   The  increased  use  of  magnetic 
concentration  may  be  of  great  importance  in  the  economical 
use  of  ores,  much  to  the  advantage  of  Canadian  sources  of 
supply.  Proximity  to  the  fuel  supply  may  become  of  less 
importance  as  it  becomes  profitable  to  transport  coal  or 
coke  to  the  ores. 

There  is,  then,  no  reason  for  believing  that  the  future  of  a 

country's  iron  and  steel  industry  rests  on  the  present  state 

of  affairs.  A  nation  or  locality  may  shortly  gain  a  decided 

advantage  m  this  regard,  and  yet.  since  the  factors  which 

»  United  States  Geological  Survey,  op,  eit.,  p.  118. 


^m% 


:5k^  _••-„ 


NATURAL  RESOURCES 


25 


have  been  mentioned  as  influencing  the  availability  of  iron 
ore  for  commercial  use  will  probably  retain  a  considerable 
importance,  it  is  well  worth  while,  before  entering  further 
on  the  study  of  the  Canadian  iron  and  steel  industry,  to 
consider  the  character  of  the  present  known  resources. 

§  6.  It  is  a  striking  conmientary  on  the  extent  and  char- 
acter of  the  iron  ores  of  Canada  that  the  greater  part  of  the 
ores  consumed  in  the  Dominion  is  not  local  product,  but 
imported  from  Newfoundland  and  the  United  States.  Yet 
Canada  possesses  all  necessary  raw  materials  for  a.  large 
iron  and  steel  industry.  The  most  important  of  those  now 
available  belong  to  the  Maritime  Provinces,  to  Quebec, 
and  to  Ontario.  For  our  purpose,  those  of  Newfoundland 
may  be  included;  and  those  of  British  Columbia  and  else- 
where will  be  treated  because  of  their  potential  value. 

§  7.  The  southern  part  of  Nova  Scotia  is  entirely  lacking 
in  iron  ores,'  but  there  are  numerous  deposits  in  other  parts 
of  the  Province.  Many  of  the  deposits,  however,  are  so 
small  as  to  be  of  no  economic  importance,  and  may  be  ne- 
glected here. 

Several  deposits  are  known  to  exist  in  Annapolis  County, 
on  the  south  shore  of  the  Bay  of  Fundy .  Deposits  of  magne- 
tite at  Clementsport  would  probably  yield  a  large  amount  of 
ore  of  fair  grade.*  Deposits  of  hematite,  a  few  miles  east,  at 
Nictaux  Falls,'  in  AnnapoUs  County,  are  the  most  promis- 
ing in  Nova  Scotia.  There  are  indications  that  the  district 
around  the  Nictaux  Falls  may  be  regarded  as  of  consider- 
able importance.  Transportation  by  rail  is  available  from 
both  the  Clementsport  and  Torbrook  fields  in  one  direc- 
tion, and  by  water,  after  a  short  haul,  in  another  direction. 
Water  transportation  brings  them  into  close  contact  with 
the  Cumberland  coal-fields  of  the  Province.*   Omitting  a 

'  J.  E.  Woodman,  The  Iron  Ores  o/  Nona  Scotia,  p.  1. 
»  Ibid.,  pp.  38-48.  »  Near  Torbrook. 

*  Woodman,  op.  cit.,  pp.  48-50. 


Ml 


me^Azii. 


i 


20    THE  CAN.VDLVN  IRON  AND  STEEL  INDUSTRY 

consideration  of  the  unimportant  deposits  that  stretch  all 
along  the  south  shore  of  the  Bay  of  Fundy,  we  eome  to  the 
district  southwest  of  the  Cobequid  Mountains  in  Colches- 
ter and  Cumberland  Counties,  where  a  great  length  of 
siderite  and  ankerite  occurs  in  close  proximity  to  coal  and 
fluxmg  material.    These  are  very  low  in  phosphorus  and 
sul;    ^.r      The  ankerite  of  the  Londonderiy  district  con- 
tains both  flux  and  ore,  but  its  use  causes  such  irregularities 
m  smelting  that  its  value  is  slight  unless  it  can  be  mixed  with 
other  ores,  such  as  those  from  the  Nictaux-Torbrook  field  ^ 
Farther  east,  in  the  East  River  district  of  Pictou  County 
deposits  o    limonite  and  hematite,  as  a  rule  superior  to 
Newfoundland  ore,  are  spread  over  many  miles  of  terri- 
tory    The  use  of  these  would  require  carriage  to  Pictou 
Harbor- a  distance  of  nineteen  or  twenty  miles  by  rail 
Mining  operations  are  more  expensive  than  in  Ne^vfound- 
^ind    and  so  these  ores  do  not  now  compete  with  the 
Nen-foundland  ore  used  by  the  steel  companies  in  Cape 
Breton  3  Yet,  proximity  to  the  Pictou  coal-fields  has  made 
them  of  some  economic  importance  in  the  past.    Manv 
hematites  are  found  on  the  shore  of  Antigonish  County. 
^Vhlle  some  of  these  have  been  exploited,  they  are  too 
siliceous  and  too  irregular  to  be  of  great  value.  One  lead 
ho^^ver  may  prove  to  be  of  large  capacity,  sufficient  to' 
justify  the  building  of  a  railway  to  tidewater." 

In  Cape  Breton  a  few  deposits  occur.  East  of  Whyco- 
comagh,  large  amounts  of  hematite  and  magnetite  are 
found,  which,  though  irregular  in  formation,  are  fair  in 

ITtl  V      t'^.?,^'^'PP"^  *°  ^y^"^y  ^y  ^'^ter  at  low 

r  ..  T,  ^'"  '  ^'^'  ^'^'  ^^'^  ^"d  «"'y  -  few  miles 
from  the  blast  furnaces  at  Sydney,  irregular  bodies  of 
hematite  and  siderite  have  been  located.  While  they  are 
otherwise  of  good  grade,  they  are  apt  to  be  high  in  sulphur. 
'  Woodman,  op.  cit    pp.  I4fi.  ~0.  .  im.,  p.  27. 

4  wL       '•  '^"  *  ^''      "'  ""^  PosnbiMes.  pp.  102-03 

Woodman,  op.  «/..  pp.  173-     5.  .  if,^   ppim~U 


zz:jit^,^-J:^y:jfiMi  ^ 


^ 


NATURi\X  RESOURCES 


27 


As  they  are  close  to  the  waterside,  they  could  be  trans- 
ported to  Sydney  at  low  cost.' 

In  general,  it  may  be  said  of  Nova  Scotia  ores  that  there 
are  few  large  deposits  of  such  known  quality  and  size  as 
would  insure  a  large  output  for  a  sufficient  number  of  years 
to  warrant  the  erection  of  new  iron  and  steel  works.  Many 
small  deposits  could  be  worked  if  the  ore  were  mixed  with 
other  ores.  But  the  grade  of  large  deposits  is  low,  and  of 
small  deposits,  variable,  and  most  Nova  Scotia  ores  are 
particularly  high  in  phosphorus  and  silicates.  While  the 
deposits  are  comparatively  shallow,  the  ores  require  hoist- 
ing. In  short,  though  Nova  Scotia  contains  deposits  of 
considerable  economic  value,  these  can  be  made  profitable 
only  as  they  complement  other  sources  of  ore  supply.'^ 


ml 


i-'  *  "'if 


III 


§  8.  Nova  Scotia  is,  on  the  other  hand,  favored  with 
some  exceptional  conditions.  Limestone  for  flux  is  found  in 
sufficient  quantities  throughout  the  Province.  Still  more 
important  are  the  coal-fields  of  Nova  Scotia,  which  are  so 
numerous  and  so  well  distributed  as  to  be  capable  of  supply- 
ing fuel  at  a  number  of  centers,  if  necessary.  Cape  Breton  is 
particularly  well  supplied.  The  beds  of  coal  at  Sydney  and 
Sydney  Mines,  by  far  the  most  important,  occupy  an  area 
of  about  two  hundred  square  miles.  The  conditions  of 
extraction  and  shipment  are  very  favorable.  Although  a 
great  part  ox  the  field  is  hidden  beneath  the  ocean,  the 
seams  can  be  followed  beneath  the  sea  by  submarine  work- 
ings.' The  coal  is  of  the  bituminous  variety  with  compara- 
tively little  irregularity.  Some  seams  produce  coal  admir- 
ably adapted  for  purposes  of  smelting.  Tests  show  that  it 
is  only  slightly  higher  in  sulphur  than  the  Connellsville 
coal,  and  that  the  excess  can  be  economically  washed  out.* 


'  Woodman,  op.  cit.,  p.  216. 

'  Canada,  Geological  Surrey,  vol.  xi,  p.  363. 


'  md.,  pp.  8-16. 


••  P.  T.  MrGrath,  "Manufacture  of  Iron  and  Slcel  in  Cape  Breton," 
Engineering  Magazine,  vol.  xxi,  p.  375. 


lil 


.llL^U. 


«8    THE  C.VN.U)IAN  IRON  AND  STEEL  INDUSTRY 

The  Sydney  coal-beds  in  Cane  Breton  are  supplemented 
by  others,  m  Richmond  and  Inverness  Counties.  In  Rich- 
mond County,  little  systematic  work  has  as  yet  been  done  « 
Inverness  County  is  a  more  important  source.  A  series  of 
exposed  measures  are  found  skirting  the  coast  and  extend- 
ing  mland  a  few  miles  and  dipping  under  the  ocean  to 
unknown  distances.  Three  companies  are  now  operating 
these  deposits.  A  threat  drawback  is  the  lack  of  suitable 
harbors  in  the  vicinity,  but  this  may  be  overcome  by 
buildmg  a  railway  along  the  coast.^ 

The  two  chief  coal  areas  on  the  mainland  are  in  Pictou 
and  Cumberland  Counties.  Pictou  County  contains  a  bed 
covenng  only  about  fifty  square  miles;  yet  the  seams  are 
deep  and  the  field  is  well  situated  for  excellent  shipping 
connections  by  rail  and  water.    The  nearest  water  ship! 
ments  are  from  Pictou  Harbor,  ten  miles  distant.  This  field 
has  been  worked  longer  than  any  other  in  the  Province 
1  he  coal  produces  coke  which  is  excellent  for  metallurgical 
purposes.'  In  Cumberland  County  is  found  the  largest  coal 
measure  of  Nova  Scotia.   It  comprises  an  area  of  approxi- 
mately three  hundred  and  fifty  square  miles  composed  of 
two  sections,  the  Joggins  and  the  SpringhUl  districts    An 
excellent  coke  has  been  made  in  beehive  ovens  at  Lonf'.^n- 
derry  from  a  mixture  of  Cumberland  and  Pictou  .  ,als 
Ihe  Joggins  area  is  close  to  Chignecto   Bay,  and   the 
bpringhill  section  is  connected  with  the  coast  by  a  short 
railway.   Of  eight  companies  operating  in  the  Springhill 
district,  the  Cumberland  Coal  and  Railway  Company 
now  controlled  by  the  Dominion  Steel  Corporation,  is  by 
far  the  most  important,  and  the  properties  of  the  com- 
pany may  be  considered  of  great  value  for  metallurgical 
purposes.*  " 

Nova  Scotia,  then,  has  practically  inexhaustible  supplies 
of  coal,  most  of  which  may  be  used  for  making  ooke,  and 

.'  ?w°*^'  iJ"^*'^"'  ^"""J'-  v°l-  XI.  P-  «.  S.     «  Ibid.,  p.  41.  S 
loia.,  p.  43,  b.  ,  j^    p  ^^  g 


NATURAL  RESOURCES 


29 


f",vorably  locaind  for  use  with  imported  ores.  No  part 
( 1  the  country  is  far  from  rail  or  water  transportation,  and 
many  parts  of  the  coast  furnish  excellent  harbors,  of 
which  Sydney  is  by  far  the  most  important  for  the  iron 
and  steel  industry.' 

§  9.  In  New  Brunswick  several  ore  deposits  have  been 
discovered.  A  few,  at  Woodstock,  in  Charlotte  County, 
are  as  yet  of  little  economic  importance,  either  because  of 
distance  from  the  market,  or  because  of  the  smallness  or 
inferior  character  of  the  deposits.  A  large  deposit  found 
near  Bathurst,  on  Chaleur  Bay,  is,  however,  worthy  of  the 
attention  it  is  receiving.  The  mines  have  a  daily  capacity 
of  1000  to  2000  tons.  The  ores,  which  are  of  fair  grade, 
are  shipped  either  to  Bathurst,  twenty-one  miles  distant, 
or  via  the  Intercolonial  Railway  to  N.-»wcastle,  where  ore 
docks  have  been  provided.  This  deposit  is  certainly  the 
most  important  source  of  ore  in  the  Maritime  Provinces, 
and  may  yet  warrant  the  building  of  blast  furnaces  at 
Bathurst.* 

The  chief  source  of  iron  ore  for  use  in  the  iron  and  steel 
industry  of  Nova  Scotia  is  the  well-known  Wabana  Mine 
on  Bell  Island,  in  Concepti(  '  Bay,  Newfoundland.  The 
mine  is  the  most  remarkable  of  its  kind  in  the  world.  For 
several  years  it  was  worked  by  open  cut,  the  ore  being 
accessible  by  merely  stripping  off  the  surface  covering  of 
rock  and  loosening  the  hematite  by  steam  drill  and  dyna- 
mite. The  upper  workable  bed  has  an  area  of  240  acres  and 
a  thickness  of  six  feet.  The  lower  bed  is  much  larger,  cover- 
ing about  817  acres  in  sight.  The  beds  dip  downward  at  an 
angle  of  eight  degrees,  and  extend  under  the  waters  of  the 
bay.  It  is  known  that,  when  the  ore  now  a'^'ailable  is 
exhausted,  submarine  operations  can  provide  an  incalcul- 
able additional  supply.*  The  cost  of  mining  is  very  low. 


i:  II 


'  Woodman,  op.  eit.,  p.  1. 
•  McGrath,  op.  eit.,  p.  876. 


*  Monetary  Times,  vol.  xlv,  p.  741. 


mx?= 


i.^^uaiA£;.^.'. 


so    THE  CAN.VDIAN  IRON  AND  STEEL  INDUSTRY 

The  ore  can  be  placed  on  board  steamship  one  mile  from 
the  mines  and  transported  to  Sydney  at  very  low  rates. 
While  It  IS  not  so  rich  as  the  Lake  Superior  ores,  yet  it  is  of 
fair  grade.  It  mixes  readily  with  other  ores,  and  its  ease 
of  mining,  its  abundance. accessibility,  and  the  cheapnessof 
trajisport  almost  neutralize  it^  slight  shortage  in  mineral ' 
Ihe  Mantmie  Provinces  and  Newfoundland  are  thus 
favored  by  excellent  measures  of  coal,  good  fluxing  materi- 
als  the  presence  of  iron  ore  deposits  of  great  commercial 
value  and  favorable  conditions  of  transportation,  all  of 
which  are  together  making  possible  the  development  of  a 
great  iron  and  steel  industry. 

§  10   Even  though  the  resources  of  Quebec  are  not  so 
favorable  as  those  of  the  Nova  Scotia  industiy.  that 
l^rovmce  has  long  been  the  scene  of  iron  and  steel  produc 
tion.  One  possible  s.       e  of  supply  is  the  iron  sands  of  the 
Moisic  district,   -ih.  ,.  assay  about  seventy  per  cent  iron 
and  are  particularly  free  from  phosphorus  and  sulphur, 
bmelting  of  these  ores,  however,  awaits  the  development  of 
economical  methods  of  concentration.^  North  of  Montreal 
many  deposits  of  ore.  usually  of  the  magnetic  type,  have 
been  located,  but  in  most  cases  they  contain  so  much 
titanium  that  their  utilization  will  be  postponed  until  some 
method  of  economical  smelting  is  devised.'  There  are  some 
other  bodies  of  ore  of  low  grade  m  the  same  district,  and 
some  containing  too  much  sulphur  or  phosphorus  to  make 
them  suitable  for  blast  furnaces;  yet  they  will  probably  be 
worked  m  the  future  when  poorer  grades  of  ore  come  into 
general  use.* 

The  most  important  deposits  in  Quebec  are  the  bog  iron 
ore  beds  which  are  found  m  many  parts  of  the  Province 

pp'  IS-m'  ^'""*  ""  ^  ^*'"'"'  ""^  ^taUurgical  Industries,  1908, 


NATURAL  RESOURCES 


31 


especially  in  Champlain,  St.  Maurice,  and  Bastican  Coun- 
ties. The  ore  is,  in  most  cases,  remarkably  free  from  such 
impurities  as  phosphorus  or  sulphur,  and  iron  made  there- 
from is  particularly  adapted  to  the  manufacture  of  car 
wheels  and  special  castings.  These  ores  are  being  rapidly 
formed  by  an  evolutionary  process  by  which  the  iron  is 
dissolved  from  ferruginous  rocks  by  the  organic  acids  in 
rainwater  and  later  concentrated  into  cakes.  The  body  of 
ore  is  thus  constantly  replaced.  Yet  even  these  ores  are 
present  in  only  limited  amount,  so  that  the  Quebec  indus- 
try must  be  largely  dependent  on  outside  sources  of  supply. 
The  fact  that  Quebec  is  entirely  lacking  in  coal  is  another 
limiting  condition.  Fuel  must  be  supplied  either  from  the 
forests  of  the  Province,  which  are  no  longer  a  very  satis- 
factory source,  or  from  the  far-distant  coal-fields  of  Nova 
Scotia  or  Pennsylvania.' 

§  11,  Ontario  is  more  liberally  supplied  with  iron  ores 
than  either  the  Maritime  Provinces  or  Quebec.  Probably 
no  other  part  of  America  can  claim  as  great  an  extent  of 
rock  so  favorable  for  the  occurrence  of  ore  deposits  as 
Ontario.'  Northern  Ontario  contains  rock  formations 
similar  to  those  found  throughout  Michigan,  Wisconsin, 
and  Minnesota,  including  iron  series  that  are  in  many 
cases  identi^,al  with  those  associated  with  the  ore  bodies  of 
the  American  ranges.' 

Most  important  of  all  the  well-known  deposits  in  Ontario 
are  those  in  the  northern  part  of  the  Province.  Of  these, 
the  Helen,  Josephine,  and  Magpie  Mines,  in  the  Michipi- 
coten  district,  produce  the  greatest  part  of  the  ore  mined  in 
the  Province.  The  Helen  Mme  deposit  is  approximately 
200  feet  deep,  400  feet  thick,  and  1000  feet  in  length;  and 

*  Canada,  Report  on  the  Mining  and  Metallurgical  Indtutries,  1908 
p.  470. 

'  Jeans,  op.  cit.,  p.  107. 

'  Ontario.  Report  of  Bureau  of  Mines,  1908,  p.  eOS. 


S2    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

produces  a  hematite  of  rather  high  grade  containing  little 
sulphur  or  phosphorus.'    The  J    Kjphine  Mine  and  the 
Magpie  Mine,  each  a  few  miles  north  of  the  Helen  Mine, 
contain  ores  of  considerable,  though  unknown,  extent,  and 
of  promising  character.    At  Atikokan,  on  the  Canadian 
Pacific  Railway,  west  of  Port  Arthur,  a  deposit  of  magne- 
tite of  Bessemer  grade  has  been  located  and  worked.  The 
ore  is  high  in  sulphur  and  requires  roasting  before  being 
used  in  a  blast  furnace.  This  district  is,  however,  so  prom- 
ising as  to   have   warranted    the   expenditure   of  large 
amo'mts  of  money  for  exploration  by  important  American 
mterests.2  East  of  Port  Arthur,  several  deposits  of  more  or 
less  value  occur.   At  Loon  Lake,  a  hematite  body  corre- 
sponding to  the  Mesaba  Range  of  Minnesota  has  been 
found.  This  deposit  is  favorably  situated  for  transporta- 
tion of  ores  to  Port  Arthur  either  by  rail  or  water.»    At 
Black  Sturgeon  River,  near  Lake  Nipigon,  hematite  ore 
has  been  discovered  and  considerable  areas  explored. 

The  most  important  recent  discovery  is  that  of  the 
Moose  Mountain  Range,  about  twenty-five  miles  north  of 
Sudbury.  This  affords  a  hard,  compact,  magnetite  con- 
taining a  greater  percentage  of  metal  than  the  hematite 
of  the  Helen  Mine.  The  ore,  of  which  there  is  possibly 
twice  as  much  as  at  the  Helen  Mine,  contains  little  phos- 
phorus and  sulphur  and  no  titanium.  A  rail  h»  ul  of  eighty 
miles  brings  the  ore  to  Key  Inlet  on  Georgian  Bay.  The 
Minnesota  ores  have  to  be  hauled  farther  to  reach  Lake 
Superior  at  a  point  much  farther  west.  Ore  docks  have 
been  built  by  the  McKenzie  and  Mann«  interests  at  Key 
Inlet,  which  is  a  splendid  haiuor,  capable  of  floating  the 
largest  Lake  vessels.^    Although  there  are  many  other 

882-S.^"  ^'^^'  '^~°  <^  »'  ^        '-a."  Eeammic  Geology,  vol.  m,  pp. 
»  Ontario,  Report  of  Bureau  of  Mines,  1908,  p.  69. 

*  EngiTieering  and  Mining  Journal,  vol.  lxxx,  1906,  p.  110. 
Owners  of  the  Canadian  Northern  Railway. 

*  Ontario,  Report  of  Bweau  of  Mine*,  1008,  p.  217. 


NATURAL  RESOURCES 


ss 


deposits  of  iron  in  northern  Ontario,  few  have  been  prox^td 
and  those  mentioned  are  as  yet  the  only  known  areas  ot 
great  econoniic  value. 

A  few  beds  of  ore  have  been  located  in  eastern  Ontario. 
At  Radnor,  in  Renfrew  County,  a  magnetite  deposit  of 
fair  quality  and  quantity  is  being  oi)erated.  Others  are 
found  at  Wilbur,  Lanark  County,  and  at  Bessemer  in  the 
northern  part  of  Hastings  County.  All  the  ore  produced 
at  these  mines  is  used  in  Canadian  fumaciis  at  Midland, 
Hamilton,  and  Sault  Ste.  Marie  in  Ontario,  and  at  Rad- 
nor, Quebec.'  Many  other  deposits  occur  throughout  the 
Province,  which,  though  not  novr  of  commercial  value, 
might  be  utilized  if  method^  n*  concentration,  of  such  a 
nature  as  to  make  their  reduction  economically  posw 
were  invented.  Considerable  attention  has  recently  u  •  i- 
devoted  to  such  po.ssibilities. 

§  12.  In  coal,  Ontario  is  apparently  entirely  lacking, 
although  it  has  been  suggested  that  the  many  peat-bogs  of 
the  Province  might  supply  a  substitute,  if  a  proper  furnace 
could  be  invented.*  This  lack  of  fuel  has  been,  naturally, 
Ontario's  greatest  drawback  in  th*  development  of  her 
mineral  resources.  As  charcoal  is  no  longer  extensively 
used,  Ontario  is  now  forced  to  impwrt  coke  or  coking  coal 
from  the  United  States  or  Nova  Scotia.  The  alternative, 
if  she  is  to  rontinuo  her  iron  and  steel  industry,  will  be  to 
l)end  her  efforts  toward  the  development  of  the  electro- 
metallurgic  method. 

It  has  been  an  axiom  that  the  development  of  the  iron 
industry  of  a  countrj'  depends  more  on  its  richness  of  fuel 
resources  than  on  abundance  of  iron  ore.  In  the  making  of 
iron,  it  is  usually  n''  ^  jsary  to  transpK)rt  the  ore  to  the  fuel. 
Yet  this  maxim  is  not  universally  applicable.  The  prob- 
lem is  rather  complex  and  can  be  solved  only  by  weighing 

*  Ontario,  Report  of  Bureau  of  Mines,  1908,  pp.  221-45. 

*  Canada,  Geolugical  Survey,  1863-66,  p.  291. 


m 


li-i 


I 


S4    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

the  various  freight  factors  involved  in  getting  the  ore  and 
fuel  to  the  furnace  and  the  finished  product  to  the  market. 
It  sometimes  happens  that  the  fuel  is  carried  to  the  ore 
instead  of  the  ore  to  the  fuel.  This  is  apt  to  be  the  case 
when  the  coal  must  be  carried  toward  the  market  for  the 
finished  product.  It  would  seem,  then,  that  Ontario,  with 
her  rapidly  increasing  manufacturing  industry  of  every 
description,  can  probably  import  coke  or  coal  from  Nova 
Scotia  or  Pennsylvania  for  use  in  her  iron  industries, 
because  the  fuel  travels  to  the  Ontario  market  and  also 
toward  the  growing  market  of  the  great  Canadian  West.i 
Low  freight  rates  on  westward  lake  and  railway  trafiSc  in- 
crease the  possibility  of  importing  coal  or  coke  for  an  iron 
industry  in  Ontario. 

§  13.  It  would  be  strange,  indeed,  if  the  ore  deposits  and 
coal-beds  of  Canada  were  confined  to  the  eastern  and  more 
developed  portions  of  the  country.   It  is  well  known  that 
Labrador  and  Ungava  ^  contain  valuable  and  extensive 
ore-beds.  Central  Ungava  contains  a  very  large  deposit  of 
hematite  and  magnetite,  but  it  is  so  far  from  transportation 
facilities  that  the  utilization  of  the  ore  cannot  be  expected 
for  a  long  time.  Similar  beds  are  found  on  the  west  shore 
of  Ungava  Bay,  and  on  the  inlands  along  the  east  shore  of 
Hudson's  Bay.  The  long  distance  which  these  ores  would 
have  to  be  carried,  together  with  the  shortness  of  the  sea- 
son of  navigation,  is  a  serious  obstacle  to  profitable  work- 
ing.  On  the  other  hand,  the  use  of  the  abundant  water- 
power  and  electrolytic  methods  might  make  possible  the 
local  reduction  of  the  ore,  providing  that  the  prospective 
Hudson's  Bay  Railway  opens  an  ever- increasing  market  in 
the  Canadian  West.' 

»  Ontario,  Report  of  Bureau  of  Mines.  1908,  pp.  199-ieOl. 
'  Now  northern  Qnolxr. 

»  A.  P.  Law,  "The  Iron  Ores  of  the  Labrador  Peninsula,"  Engineering 
Magazxne,  vol.  xix,  p.  *05. 


NATURAL  RESOURCES 


85 


§  14.  Enthusiastic  Westerners  have  sometimes  declared 
that  the  West  itself  may  some  day  develop  an  iron  and 
steel  industry.  Evidence  presented  before  the  Senate  of 
Canada  shows  that  there  are  large  deposits  of  ore  along  the 
McKenzie  River,  and  it  is  well  known  that  Alberta  con- 
tains enormous  resources  of  low-grade  coal  and  some  of 
excellent  coking  quality.'  The  resources  on  the  mamland 
and  islands  of  British  Columbia  are  better  known.  On  the 
mainland,  ores  are  found  in  several  districts.  At  Cherry 
Bluff,  near  Kamloops,  an  out-crop  of  ore  appears.  Up  to 
the  present,  however,  the  ore  has  been  used  for  fluxing 
purposes  only,  at  Nelson,  Tacoma,  and  Revelstoke.^  A 
deposit  of  red  hematite  of  considerable  quantity  has  been 
found  in  the  Cariboo  district,  but  it  is  too  remote  from 
railroad  and  other  means  of  communication  to  be  of  great 
commercial  value.'  A  few  other  deposits  have  been  located 
on  the  mainland,  but  they  are  usually  of  little  economic 
value  because  of  lack  of  transportation  facilities,  or  because 
they  are  of  inferior  quality  or  small  in  quantity. 

If  British  Columbia  is  to  have  any  important  iron  and 
steel  industry,  it  must,  therefore,  look  to  other  more  avail- 
able resources  on  the  coast,  and  these  may  possibly  be 
found  on  Vancouver  and  Texada  Islands.  Vancouver 
Island  offers  several  important  resources.  There  are  a  few 
properties  of  which  the  surface  indications  are  so  promising 
that  the  deposits  may  become  the  object  of  development  in 
the  near  future.  Among  these  are  the  deposits  at  Sooke 
Harbor,  nea  Victoria,  those  near  the  Gordon  River,  those 
on  Copper  Island,  those  near  Barkley  Sound,  those  near 
Head  Bay,  and  especially  those  on  the  Klaanch  River. 
Some  ores  are  too  irregular;  others  are  not  suflBciently 
extensive.  Few  are  far  from  water  transportation,  and 
excellent  harbors  are  furnished  by  the  numerous  indenta- 

•  Canada,  Canada's  Fertile  Northland,  1907,  p.  20. 

'  Canada,  Report  on  tiie  Mining  and  MetaUurgicd  Industries,  1908,  p.  216. 

'  Ibid.,  p.  218. 


M 


36    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

tions  of  the  coast.  In  general,  the  ores  varying  from  52  to 
66  per  cent  in  metal  are  of  very  satisfactorv  grade    Phos- 
phorus IS  not  present  in  prohibitive  quantities,  as"  a  rule 
but  the  percentage  of  sulphur  often  necessitates  roasting 
the  ores  previous  to  their  reduction.' 

Besides  ^hese  somewhat  undeveloped  ores  of  Vancouver 
Island  are  the  well-known  deposits  of  Texada  Island 
There  rs  every  probability  that  large  quantities  of  mer- 
chanteble  magnetite  exist  here.   The  known  deposits  are 
situated  close  to  the  water-front,  and  a  little  bay  offers 
good  shipping  facilities.    From  none  of  the  claims  has  the 
ore  to  be  transported  more  than  a  mile  and  a  half  to  water 
Ihe  ore  ranks  high  in  quality,  containing  from  59  to  64 
per  cent  of  u-on.  while  the  phosphorus  content  is  very  low 
The  high  proportion  of  sulphur,  the  only  objectionable 
feature,  is  removable  by  roasting.^ 

Nor  is  British  Columbia  unsupplied  with  fuel.  On  Van- 
couver Island  there  are  now  two  coal  :x>mpanies  in  active 
operation  capable  of  producing  a  large  output,  if  necessaiy . 
One  of  them  also  produces  coke  of  splendid  metallurgical 
quahties  As  the  coal-beds  are  near  tidewater.  coaU^ 
be  quickly  and  cheaply  transported  to  the  market  The.^ 
are  also  many  beds  of  coal  on  the  mainland.  For  the  pres- 
ent,  however,  the  Crow's  Nest  Pass  district  has  the  mo- 
nopoly of  coking  coal,  since  the  coal  from  other  beds  con- 

aZii^  T^  '"'^!'."^  *?  P-:^"^  "^^^  «f  the  desired 
dist  ict'of^lTr''  '^''f''""^'  '"-'"des  the  Lethbridge 
district  of  Alberta,  opened  .several  years  ago  by  the  south- 
ern branch  of  the  Canadian  Pacific  Railway. 

§  15.  Information  concerning  the  extent  and  character 
of  Canadian  iron  ore  deposits  is  necessarily  fragmentary, 
pp.  s^J^I:"'^'^"'*'''''  '-»  Ore  Depo^u  of  Vancouver  and  Terada  Islands. 

*  Iltid.,  pp.  21-24. 
pp'  i:^:  '^  -  '*'  ^-"^  '^nd  M^aUur^cal  Industrie..  1908. 


i*        *_      "^^ 


NATURAL  RESOURCES 


37 


since  comparatively  little  work  of  investigation  has  been 
carried  on  as  yet.  It  is  quite  impossible  to  give  figures 
which  will  convey  even  an  approximate  idea  of  what  may 
be  called  iron  ore  reserves.  In  older  countries  the  study  of 
iron  ore  deposits  has  been  conducted  for  years,  even  centu- 
ries, and  in  such  cases  it  is  justifiable  to  present  figures 
which  may  be  claimed  to  represent  close  approximations. 
But  until  lately  Canadian  deposits  have  not  attracted  the 
attention  to  which  they  seem  entitled,  and  the  information 
available  is  on  the  nature  and  character  of  ores  and  on  the 
modes  of  occurrence  as  shown  by  surface  indications, 
rather  than  on  the  volume  and  extent  of  ore  supplies  as 
shown  by  systematically  conducted  studies  of  act  il 
workings  and  developments.  A  beginning  in  the  direction 
of  systematic  surveys  was  made  by  the  inauguration  of  the 
Mines  Branch  of  the  Dominion  Department  of  Mines, 
under  the  direction  of  Dr.  Eugene  Haanel. 

There  is  very  little  doubt  that  Canada's  failure  to  take 
her  place  among  the  important  iron  ore-producing  coun- 
tries of  the  world  is  due  to  the  lack  of  knowledge  con- 
cerning its  iron  resources,  and,  to  a  certain  extent,  to  the 
comparatively  limited  home  market,  rather  than  to  lack 
of  workable  deposits.  By  far  the  greater  pavt  of  Canada's 
3,60*^  1  square  miles  is  "terra  incognita"  as  regards  its 
m   •  sources,  or  even  its  gentral  geological  features. 

Tl  iity  of  attempting  even  rou^^hly  to  estimate  Can- 

ada .i.are  in  "an  approximation  of  the  world's  supply  of 
iron  ore"  is  apparent.  The  deposits  re-.'iewed  so  briefly  are 
all  in  the  older  and  more  or  less  settler^  and  known  regions. 
New  iron  ore-bearing  districts  will  almost  certainly  be  dis- 
covered as  the  settlement  of  the  country  proceeds,  and  it  is 
not  improbable  that  they  will  prove  to  be  incomparably 
larger  than  the  present  known  resources.* 

«  The  Iron  Ore  Retource*  of  the  World,  IDIO,  pp.  719-22. 


If 


If 


PART   TWO 

THE  IRON  INDUSTRY  OF  CANADA  PRIOR  TO 

THE  ADOPTION  OF  THE  NATIONAL 

POUCY  IN  1879 


■4J 


CHAPTER  in 

THE  HISTORY  OF  THE  INDUSTRY 

§  1.  As  we  have  already  suggested,  the  history  of  iron 
smelting  in  Canada  has  not  been,  until  the  last  few  years,  a 
brilliant  one.  The  industry  had  an  early  beginning,  how- 
ever, and  unceasing  efforts  have  been  put  forth  to  establish 
it  permanently  on  Canadian  soil.  Yet  many  of  these  at- 
tempts have  resulted  in  failures.  The  story  of  the  failures 
and  the  successes,  their  causes  and  conditions,  prior  to  the 
establishment  of  the  national  policy  in  1879,  is  the  theme 
of  the  two  following  chapters.  For  convenience  a  chrono- 
logical treatment  of  the  history  of  the  industry  in  the 
different  Provinces  will  be  followed. 


§  2.  As  with  most  "first  things"  in  Canada,  the  first 
iron  furnace  was  located  in  Quebec.  Although  the  manu- 
facture of  pig  iron  in  Quebec  has  never  assumed  any  great 
importance,  from  very  early  periods  pig  iron  of  high  qual- 
ity has  been  produced  in  the  French  Province. 

The  earliest  attempt  at  production  on  record  is  that  car- 
ried on  for  a  long  period  of  years  at  St.  Maurice  Forges, 
near  Three  Rivers,  on  the  St.  Lawrence  River.  Ore  was 
discovered  there  as  early  as  1667,  and  was  probably  known 
earlier  to  the  Indians  and  Jesuits.  Colbert,  anxious  to  dis- 
cover iron  ore  in  New  France,  had  caused  some  explora- 
tions to  be  made  in  1 667,  resulting  in  the  discovery  of  de- 
posits at  Three  Rivers,  but  they  were  reported  as  offering 
nothing  advantageous  in  either  quality  or  quantity.*   In 

»  F.  C.  Wurtclle,  "Historical  Record  of  St.  Maurice  Forges,"  Proceed- 
ings  and  Traniactions  of  the  Royal  Society  of  Canada,  vol.  rv,  sec.  i,  p.  78. 
For  the  geographical  location  of  the  plants  mentioned  sec  the  maps  in  the 
Appendix. 


5" 

■  u  I 

:'.     i  1 

:  ii- 


'if 
1-i 


42    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

1672  Count  de  Frontenac  reported  that  he  had  commenced 
to  mme  ore  and  strongly  urged  the  establishment  of  forges 
and  a  foundry.'  In  1685  French  ironworkers  declared  a 
samp  e  to  be  of  good  quality  and  percentage.^  Arther 
report,  m  170G.  urged  the  development  of  these  natural 
re^urces.  Lack  of  skilled  workmen  and  suitable  wat" 
power,  and  the  absence  of  a  sufficient  market  for  the  prj 
uct  seem  to  have  postponed  further  developments 

to  mXhI""  H  f  'Y!^""''  ^^  «^^^  «  royal  license 
to  M  Francheyille  to  work  the  iron  ores  of  the  St.  Maurice 
v.cm.ty  and  advanced  ten  thousand  Hvres  for  aid  be^ct! 
mg  a  furnace.  However,  deeds  and  rights  were  surrendered 
to  the  Crown  m  1735.  In  1736  Cugnet  ct  Compagnie.  or 
La  Compagme  des  Forges,  were  advanced  ten  thousand 
hvres  and  were  empowered  to  erect  ironworks  on  cond  tion 
that  a  blast  furnace  be  built  immediately.^  When  in  1737 
J^"'  ?  P'P"^'^  ^'^''^-d  that  they  wei^Tn  ^ntoi 

would  be  compelled  to  pay  ruinous  prices,  the  intendani 
granted  them  the  fief  of  St.  fitienne^  for  a  time.  The  fi'm 
made  cannon  and  mortars,  iron  stones,  kettles  and  barT 
and  also  tned  to  make  steel,  but  could  not  bring  i't  pe^.' 
fee  on  because  no  one  was  acquainted  with  the^  best 
method  of  preparing  it.«  In  1739  they  brought  fn,m  France 
a  skilled  artisan  who  possessed  knowledge  of  the^ifferent 
branches  of  manufacturing  wrought  and  cast  iron  ^  S 
as  of  the  working  of  mines,  and  thr  works  and  melh^dlo 
workmg  were  improved.    Finally,  the  company.  throLh 
lack  of  capital,  was  forced  to  give  up  ^ 

•  Bartlett,  op.  cit.,  pp.  510-11. 
^  Wurtelle,  op.  cit.,  p.  80. 
Peter  Kalm.  T^am,  ,„  North  Amenca,  vol.  ,„.  p.  89. 


^*:^'»^" 


THE  HISTORY  OF  THE  INDUSTRY 


43 


men  were  sent  out  from  France,  the  blast  furnace  was 
partly  rebuilt,  and  additions  were  made.  When  the  forges 
were  visited  by  M.  Franquet  in  1752,  they  had  assumed 
very  considerable  proportions.'  Water  power  ran  the 
machinery  and  about  180  French  soldiers  of  the  Three 
Rivers  garrison  were  the  principal  workmen.  The  ore  used 
was  rich  and  tolerably  clean.  Charcoal,  the  only  fuel,  was 
secured  in  the  neighborhood  in  great  abundance.  The 
boiling  metal  was  put  in  a  gutter  of  sand  and  moulded  into 
stoves,  pots,  and  kettles,  or  cooled  and  hammered  into  bars. 
The  iron  was  of  excellent  quality,  soft,  pliable,  and  tough.'* 
M.  Franquet  dwelt  on  the  necessity  of  greater  economy  at 
the  forges  and  the  advisability  of  sending  out  more  compe- 
tent operatives  and  furnace-men  from  France.  As  improve- 
ment was  effected  in  the  manufacture  of  iron  between  1752 
and  1759,  many  of  his  suggestions  probably  were  acted 
upon.  Yet  a  great  number  of  useless  people  on  large  sala- 
ries, such  as  a  director,  a  comptroller,  a  treasurer,  a  con- 
tractor for  the  forges,  several  overseers,  a  chaplain,  and 
others,  besides  waste  and  extravagance  combined  with  fraud, 
connived  at  by  those  who  passed  the  accounts,  rendered 
the  establishment  unprofitable  and  even  burdensome  to 
the  Crown.' 

Moreover,  the  forges  produced  more  iron  than  the  colony 
could  consume,  and,  although  some  was  exported  to  France, 
the  authorities  were  not  convinced  that  it  was  fit  for  fire- 
arms. A  naval  establishment  for  Canada,  and  the  use  of 
iron  in  composite  shipbuilding,  were  proposed.  Though 
orders  were  given  for  the  erection  of  docks  at  Quebec, 
nothing  was  actually  accomplished.* 

In  1760  Canada,  and  with  it  the  St.  Maurice  Forges, 
passed  into  the  possession  of  Great  Britain.  For  one  hun- 


i. 


»  Barllelt,  op.  cit.,  p.  511. 
»  WurtcUe,  op.  cit.,  p.  823. 
*  Bartlett,  op.  cit..  p.  515. 
America,  bk.  iv,  p.  372. 


'  Swank,  op.  cit..  p.  850. 
Quoted  from  Russet's  Hittory  of  Kortk 


44     THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

n^rr  *?!  '°'^''  """'^  ^'^"^^  ^  ^""°"«  =«™Panie8  and 
operated  with  more  or  less  success.i   From  1761  to  1763 

they  were  used  for  converting  unserviceable  ordnance  intc 

bar  iron.  Production  was  usually  carried  on  to  advantage 

but  U  was  a  troublesome  undertaking  not  congenUl  t' 

nnhtary  men.    The  works  may  or  m'ay  not  hf^e  bee„ 

operated  down  to  1767.  when  the  Crown  leased  the  tract  of 

quantity  of  iron  was  turned  out  with  success  ' 
It  appears  that,  when  the  American  invasion  of  1776 

ers  wUh  both  goods  and  money.  He  cast  shot  and  shell  to 

uniti^sLt  rr  ^'  ^"^^  ^"^  «"^"^  -  «ff  ^  the 

Lnited  States    taking  with  him  all  the  funds  and  the 

irt^H  .V^'  '^.^^  "'"""^^^  *«  *^«  A---n-  hIv! 
mg  cashed  the  vouchers,  amounting  to  about  $10,000.  he 

recover  by  dint  of  hard  work,  and  continued  operations  till 
the  expiration  of  its  lease.  «""!«  mi 

no^J^^^^^T'^'  ""r  '^^'^^  '"^^^  f«^  «  sixteen-year 

S^;f'nart'     T"/'^  ^'^^  ^'''^"^''^  ^'^^  hands  of  a 
senes  of  partnerships.*   In  1809  the  manufacture  of  iron 

IZ^  aTd  tf^^"'  manufacturing  industiy  in  The 
country,  and  there  was  a  considerable  export  of  cast-iron 

o"n     IT^'^^'^  '''''^'    ^"  ''''  t^e  estab^hment 
consisted  of  eve^^  convenience,  furnaces,  forges.  foundTs 

used  in  the  Province,  such  as  large  potash  kettles,  machines 
for  mills,  various  kinds  of  oasts,  a  superior  quality  o 

aZ'nt  tTo"; 7' ''; r "• 'P^' ^^'^'^-^ manufal,^.'and 
tion.   T^o  hundred  and  fifty  to  three  hundred  men^ere 

'  Wurtelle,  op.  cU..  d  84  »  n  ^i  .. 

»  Hugh  Gra/  L^;.;-/^,  Ca««ia.  p  ,?'''''"'  •'^-  "^-  P'  "«• 


THE  mSTORY  OP  THE  INDUSTRY 


45 


employed  in  the  works.  Of  these  the  overseers  and  em- 
ployees in  the  model  department  were  English  and  Scotch, 
and  the  unskilled  workmen  generally  Canadians.^ 

In  1846  the  Crown  sold  the  forges  to  Henry  Stuart,  of 
Montreal,  who,  in  turn,  leased  them  to  James  Ferrier  by 
whom  they  were  worked  until  1851.  Stuart  then  sold  his 
interest  to  Andrew  Stuart  and  John  Porter,  of  Quebec. 
These  men  abandoned  the  enterprise  because  of  the  grow- 
ing scarcity  of  ore  and  charcoal  in  the  neighborhood.  When 
Henry  Stuart  had  purchased  the  proi)erty,  he  paid  very 
little  down,  and  the  balance  was  never  paid.  In  1861  the 
Crown  therefore  sold  the  property,  together  with  a  farm, 
for  $7000.  The  purchaser  sold  the  furnace,  works,  houses, 
cottages,  and  water  privileges  for  $1700  to  John  McDougall 
in  1862,  and  he  sold  the  land  to  squatters  and  settlers,  who 
supplied  the  ore  and  wood  to  the  forges,  which  Mr. 
McDougall  once  more  put  in  operation.  As  the  product 
was  used  chiefly  for  the  manufacture  of  car  wheels,  the 
trade  in  stoves  and  kettles  fell  off.* 

In  the  seventies,  however,  ore  of  inferior  quality  had  to 
be  used,  and  the  wood  yielded  an  unusually  small  amount 
of  charcoal.  The  supply  of  bog  ore  which  had  to  be  drawn 
from  four  to  nine  miles  was  almost  exhausted  by  1874. 
Limestone  had  to  be  carried  several  miles  at  a  cost  of  one 
dollar  pe:  Ic;-^.  While  the  iron,  soft,  tough,  clean  and  close 
in  texture,  and  pos{>»ssing  fine  chilling  qualities  wa*  u/  tin- 
doubted  merit  and  m  great  demand  for  making  car  wheels 
and  axles,  the  supply  of  ore  and  wood  was  rapidly  dis- 
appearing. An  attempt  to  sme'*  'he  magnetites  of  Leeds 
County  was  unsuccessful  because  :  he  furnace  was  not  the 
proper  kind  and  the  operators  wore  inexperienced  in  treat- 
ing other  than  bog  ores.'  Conrequently,  although  the  fur- 
nace was  still  making  gocd  charcoal  iron  in  1879,  it  was 

>  Bartlett.  op.  eU.,  p.  516.  *  Ihid.,  p.  517. 

'  J.  B.  Harrington,  "  Notes  on  Iron  Ores  of  Canada  and  their  Develop- 
idcnt,"  in  Canada,  Geolofficd  Suney,  187d-74.  p.  248. 


46      THE  C.V^A^IA^    IRON  AND  STEEL  INDUSTRY 

abandoned  in  m'V  ut  v  hich  time  it  ^vas  the  oldest  active 
furnace  on  the  coiuincnt 

Although  wrijors  have  always  given  .speciul  attention  to 
thrs  histonc  en.leavor  at  St.  Maurice.  neverth.-Iess,  nmny 
other  attempts  to  smelt  Q.iebec-  -  numerous  ores  have  been 
made.  In  17»8  a  bl.st  f  .,  .ce    -.sting  l.ouse.  two  fl^ 
wo  kshops  and  dwclhng  Ku  ..   vere  built  on  the  east  side 
of  the  Bastican  R.ver.  in  (  hampitin  County.  Thev  were 
in  operation  for  some  t.  ,..    If-  oort,  show  that  bo'th  ore 
and  wood  were  more  p!e,  •  u.>  OunulSt   Maumv.  but  !he 
proprietor  d,e<J  and  th,M. I.    -w       bandon  d.M„  18o7  the 
Canada  Iron  and  Maun   .cturi-.g  Company  of  Montreal 
bu.It  a  blast  furnace  at  Hull.  n..r  (^tawa    and  for  two 
years  pr.vl„cod  a  superior  quahty  of  „.«  iron,  but  because 
of    he  h.Kh  cost  of  charcoal,  excess  of  sdr  !mr  in  the  ore 
and  improper  man«Ke,n.-nt.  the  t^nor,      result,  ^vcre  r.  ,[ 
satisfactory.    Operatious  were  stoppe<l,  ,,nd  tho  fun,     e 
having  l>een  much  injured  by  a  forest  tire,  was  abandoned 
a  few  yeara  later.'  "oucu 

About  the  same  time  the  Radnor  Forge,  at  PernioM  ,n 
Champlam  County,  approximately  ten  mi,  from  Tnrce 
Rivers,  were  erected  by  Messrs.  i^rue  and  Co,  pany.  Tf,e 

rolling  mill,  a  car-wheel  foundry  in  Thr  ^.  Rivers     i„d 
40.000  acijs  of  freehold  timber  and  ore  l.^ds.  Th    i .^de 
bog  ore  which  was  brought  to  the  furnacv.  ,    .tlv  bv  the 
workn.en     .the  company,  and  partly  by  the  fanneks  on 
whose  land  it  was  found,  yielded  40  to  50  per  m.t  .  .etll 
when  washed  free  of  adhering  earth.    Limestone,  s   ^  e^ 
in  the  vicinity  was  used  as  flux.   A  .    iractorv  sur    sto^ 
^as  used  for  the  furnace  hearths.  In  18«3  about  '2,^  k)  Z. 
of  cast  iron  were  produced.  In  digging  up  and  bring^n.  the 
ore  to  the  furnace  and  in  prej,  .ring  and  trar.sportiag  the 
charcoal  about  200  to  400  men  were  .mployeu. 

I  Swank,  op.  a,.,  pp.  350-51.  ,  fiartlett.  op  cU  8 

•  Harrington,  op.  cil.,  pp.  73-74.  ^  ^-  "'  •  -       = 


TH''   iUSTOir.    OF  TITK    L\D!  -TRY 


47 


Thr  chief  pr.  ict  of  tht  rompany  was  cast-in  n  wheels 
f<»r  railw  ty  car  I'oi  t  riis  tf  «  tnetH)  ^a»  very  well  ;i(kipted. 
\VroUf,'ht  iron       i.  also         luc«  Vh,      the  roil uig  mill 


and  forces  wen-  tjestri 


■•ii 


only  I  'le  forge  s  were 


r<>hiiilt,  and  the  iron  wu  <  nt  to  the  <  ir-wiieel  fou  dry  at 
Three  Rivers.'  To  lack  of  railrii  d  f  !/>ilities,  wh  pre- 
vttited  sii;  ''ip*«  from  heih»  a  nei  nu  ••  than  seven  milcS, 
uixi  which  ;  uidicA!  i  I  th-  pru  . 
for  till  prouict.  to  her  ^  ')ad 
trom  f  '"s,  coutril>i.t»-d  to  Mi  failu/ 
early       'tities.' 

ron  C(».   paii_\ 

rlh  •ihorf  ,.f 

-f  ^         -'^al. 

;nar  e 

blow 

!-  at 


III  WV.  the  .1  »Isi< 
the  iron  sands  on  In 
renee.   As  '"Tr  >; 

successful);    '.\ 
York,  he  ei        dse 
Montrf»al.         n  si     ;> 
f  el.  The  produ  t  \  ,is 


'  I.  fin.  narket 

lOi     nei  L  and  disas- 

f  the  r>     it  in  the 

f. 


.V 


Montri        tar 
But  in .      le,  ,  i   ilnwii 

niaster>    .i  du        ^  $15  ;  f 
at  a  tin.e  v  hen  ilie  r  'e 
from  $7  t(,  i^fi.SO  pe 
peaie'<  in  1875,  anci 


to^ 

■t. 

ed  tlu 

ev  northern  N 

turn.;  vS at  Moisic,  nc  tr 

d  as  ore,  and  charcoal  as 

United  States  or  used  at 

ng  null  I    lit  by  the  company  in  1874. 

protest  from  Americm  iron- 

1  was  placed  on  Moiilj  iron 

!in    -V  pig  iron  was  reduced 

Kef'       tlie  .special  duty  was 

iron,   Imitted  at  the  ordinary 


an 


1 

Hi 

rai 


itp.<  the  coi;     >ny  v  w     .mpeileci  to  shut  down  the  plant 


..>  int;       juida'  on.     Vt  this  time  there  was  no 
in  '  ■    Ca:     la  for  ..  large  output  of  this  class  of  iron. 
■•  tli       up*      .tion  of  British  goods  was  seriously  de- 
■iitiir  tir      lark* '.^  an!  there  was  a  downw   ■■';  move- 
in  '       L'nite<l  States,  the  price  of  iron  fell 
(  .inai.a  ,       -         J." 


'  taiuida.  (.'.ohigical  >  1863,  pp.  CS8-87. 

-  ''  tnadian  En^neer,  \u\.  u    |)p.  4-5. 

^       'ited  SlatM  Stalyle.t.  vol.  17  chap.  315,  sees.  4-5. 

*  d.,  vol.  18.  rhap.  36,  sec.  6.  »  Bartlett,  of^.  eit..  p.  581. 

•  ^     .\ppendix  H.  .No.  1  foundry  pig  iron  fell  in  pnce  from  iK  a  ton 
It    '      i;  to  $30  m  1874;  to  $25  in  1875. 


48      THE  CWADIAN  IRON  AND  STEEL  INDUSTRY, 

The  St.  Francis  River  Mining  Company  erected  a  blast 
furnace  m  the  county  of  Yamaska.  near  Riviere  aux 
Vaches  in  1869,  and  produced  charcoal  pig  iron  until  1873 
Ihe  property  was  purchased  by  Messrs.  McDougall  and 
Company,  and  operated  till  1880.  when,  owing  to  the  ex- 
haustion  of  the  bog  ores  within  paying  distance  from  the 
furnace,  it  was  dismantled.* 

In  the  winter  of  1873  the  Haycock  Irou  Mine,  eight  miles 
northeast  of  Ottawa,  was  opened,  and  5000  tons  of  ore 
raised.  Works,  consisting  of  a  bloomary  forge,  a  steam 
hammer,  engines,  pumps,  workmen's  cottages,  and  a  saw- 
mill, were  built.  Some  blooms  of  fine  quality  were  made 
and  exported  to  England,  but  for  some  reason  the  enter- 
clo^''^'''  "*"'  "  commercial  success  and  the  place  was  soon 
The  Canada  Titanic  Iron  Company,  formed  as  the  result 

0„JL  "T.?  K  ^i*^"''^'^"^  «^  «t>o"t  sixty  miles  belo-^ 
Quebec  in  1871   built  two  blast  furnaces,  extensive  build- 

»  J  fi.  kT^  ^'^."Tr  ""'^  '"''^"'  ^"*  *^^  enterprise  was  not 
a  profitable  one. ^  Not  only  was  the  ore  high  in  sulphur, 
phosphorus  and  chromium,  but  the  titanium  proved  to  b^ 

mal'Zt  ?r  ',\*'''  T  ""^  °«^««tated  the  use  of 
190  to  200  bushe  s  of  charcoal  per  ton  of  pig  iron  produced. 
An  admixture  of  other  ores  was  necessary  to  reduce  the 
proportion  of  titanium  and  the  consumption  of  fuel »  In- 
stead  of  produ<.ing  60  tons  a  week,  as  was  expected."  the 
first  furnace  produced  only  2(>  tons  of  pig  iron  in  the  first 
week,  W  tons  in  the  second,  and  18  in  the  third.  The  enter- 
fnTsZy  "^^  "'^^"^""^^'  ""d  the  plant  was  dismantled 


•  Ilnd.,  p.  522. 


'  Baptletl,  op.  rit.,  p.  520. 

*  Httrrin^-rton.  op.  rit.,  p.  mi. 

*  Journal  of  th.  Iron  and  Steel  Institute,  1876,  no.  1,  p.  100 

•  HarrinKton.  op.  rit.,  p.  251. 

•  Journal  of  the  Iron  and  Steel  Institute,  1874,  no.  1.  p.  igi 
Bartlett,  op.  cit..  p.  520.  '^ 


THE  HISTORY  OF  THE  INDUSTRY 


40 


Another  blast  furnace,  built  by  Messrs.  McDougall  & 
Company,  at  L'Isiet,  about  four  mi'  5  from  their  works  at 
St.  Maurice,  was  abandoned  before  1879.  i 

In  1870  another  attempt  was  made  to  smelt  the  iron 
sands  of  Quebec.  Steel-works  were  erected  in  Quebec  for 
the  direct  manufacture  of  steel  from  these  high-grade  ores. 
A  well-constructed  Siemens  regenerative  furnace  was  used. 
In  making  steel,  the  sand,  purified  by  a  magnetic  concen- 
trp*'r«g  machine,  was  mixed  with  tar  and  charcoal  powder 
ir  i,  -ox  and  the  mixture  was  pressed  into  square  bricks. 
These  were  then  piled  upon  the  furnace  hearth  and  melted 
down  to  steel,  which  was  finally  tapped  off  into  ingots. 
Difficulty  seems  to  have  been  experienced  in  obtaining  a 
regular  and  homogeneo.  *  product.  Pouring  gave  a  good 
deal  of  trouble.  The  ingols  were  freqtiently  honeycombed, 
and  the  forge  products  were  liable  t.,  contain  flaws.  The 
defects  which  led  to  failure  would  have  been  evident  to  a 
skilled  metallurgist,  and  might  have  been  overcome  by 
him,  but  these  operations  were  conducted  by  a  man  who 
knew  nothing  either  of  the  theory  or  practice  of  steel- 
making.  As  a  consequence,  nothing  was  accomplished  and 
the  works  were  abandoned. ^ 


m 


§  3.  Ontario  has  endeavored  to  establish  the  iron  indus- 
try at  several  periods  in  her  history.  The  first  attempt  to 
manufacture  i-on  was  made  as  early  as  1800  at  Lyndhurst, 
then  called  Furnace  Falls,  on  the  Gananoque  River,  in 
Leeds  County.  Water  power  was  used  to  drive  the  machin- 
ery and  to  work  the  blast.  The  ore.  which  had  to  l>e  drawn 
a  considerable  distance,  was  of  inferior  quality  and  insuffi- 
cient quantity.  At  one  time  an  attempt  was  made  to  cast 
pots  and  kettles  for  the  use  of  settlers.  After  two  years' 
trial,  the  venture  proved  a  commercial  failure  and  was 
given  up.  A  forge  for  the  manufacture  of  bar  iron,  built  at 
a!)out  the  .same  time  for  the  same  company,  was  in  opera- 
»  Barllett,  op,  n«..  pp.  Si^-i».       »  .Vnnr^.-,^,-  Timfs,  yd.  B.  p.  5Qi. 


f-I 


50      THE  C.VN.VDLVN  IRON  AND  STEEL  INDUSTRY 

tion  unfil  1812.  On  account  of  the  lack  of  capital  and 
dorangemcnt  of  business  during  the  war,  the  place  was  shut 
down  and  never  opened  again. 

The  next  attempt  was  made  in  western  Ontario  at 
^ormandale  (then  known  as  Potter's  Creek),  in  the  county 
of  Norfolk,  near  Lake  Erie.  In  1815  John  Mason,  an  Eng- 
lishman, started  to  build  a  furnace  to  smelt  the  bog  ores  of 
the  district.  A  creek  furnished  all  the  required  power,  and 
Lake  Erie  was  convenient  for  shipping  the  product  to  any 
ports  along  the  shore,  or  for  receiving  any  supplies  that 
might  he  required.   Moulding  sand  was  abundant  on  the 
site  of  the  furnace  and  a  great  variety  of  timlier  for  char- 
coal  was  easily  obtained.  The  high  price  of  iron  was  another 
favorable  mccntive.  But  the  bog  ore  was  widely  scattered 
in  very  small  bodies.    Further,  it  required  many  experi- 
nients  to  know  the  best  method  of  working  the  ore,  and,  in 
addition,  the  few  men  in  the  country  capable  of  working 
the  furnace  were  independent  and  unruly.  Unfortunately, 
the  (Tovernment  gave  no  aid,  and  when,  after  a  few  tons  of 
iron  had  been  produced,  the  inner  wall  of  the  furnace  gave 
way.  the  project  was  temporarily  abandoned. 

In  1820  the  property  was  purchased  by  Mr.  Joseph  Van 
Norman,  who,  in  1821.  formed  a  partnership  and  built  a 
new  blast  furnace  at  an  expense  of  $8000.  The  product 
was  of  excellent  quality.  With  eight  or  nine  tons  of  bog  ore 
secured  from  the  marshes  and  swamps  within  a  distance  of 
twelve  miles,  alK>ut  three  tons  of  pig  iron  were  produced. 
1  he  furnace,  which  was  in  blast  about  eight  or  nine  months 
per  year,  running  night  and  day.  produced  700  to  800  tons 
of  iron  at  an  annual  consumption  of  4000  c-ords  of  hardwood 
made  into  charcoal  in  the  usual  way. 

In  the  early  stage  of  the  enteri)rise,  the  iron  was  con- 
verted  into  various  kinds  of  castings,  for  there  was  no 
niarket  for  the  pig  iron.  Even  before  the  opening  of 
the  ^^elland  Canal  in  1820.  stoves,  kettles,  and  other 
iron  goods  were  sent  very  long  distances,  particulariy  in 


'^^W:iw^:^'^i^w^^fmtwsm 


THE  HISTORY  OF  THE  INDUSTRY 


51 


winter.  The  wares  produced  were  disposed  of  along  the 
shores  of  Lake  Erie  and  tf^ken  into  the  interior  by  teams. 
Afterward  towns  on  the  canal  and  ports  on  Lakes  Erie  and 
Ontario  were  accessible  by  water  and  two  vessels  were  kept 
busy  during  the  summer  months.  Hamilton,  Toronto,  and 
Port  Hope  were  thus  -upplied,  and  from  these  centers 
wares  were  distributed  into  the  back  country.  Some  goods 
were  sent  as  far  as  Montreal.  Since  the  country  was  over- 
stocked at  times,  some  of  the  product  was  exported  to 
Buffalo  and  even  to  Chicago,  as  well  as  to  other  Lake  ports. 
The  business  seemed  to  be  suited  to  the  Province  and  was 
started  at  the  right  time  to  be  of  use  to  the  new  settlers 
in  furnishing  sugar-kettles  and  kettles  for  boiling  ashes. 
There  was  in  those  days  little  money  in  the  country,  and 
business  was  carried  on  largely  by  barter.  Anything  the 
people  had  to  sell  was  brought  to  the  furnace  and  exchanged 
for  the  wares,  or  due-bills  payable  in  ironware.  At  one 
time  the  l>ooks  of  the  establishment  showed  outstanding 
over  $30,000  of  these  due-bills  for  iron. 

In  1826  iSIr.  Van  Norman  bought  out  his  partners  in 
favor  of  his  brother.  The  business  was  carried  on  till  1847, 
when  the  plant  was  abandoned,  because  of  the  exhaustion 
of  fuel  and  ore  in  the  neighborhood.  The  firm  also  owned 
a  forge  at  Port  Dover,  where  for  some  years  bar  iron  for 
horse-  and  sleigh-shoes^  was  manufactured. 

The  township  of  Marmora,  in  Hastings  County,  has  long 
been  noted  for  its  iron  ores.  Ironworks  were  first  started 
there  about  1830  by  a  Mr.  Hayes,  who,  after  spending  a 
fortune,  gave  vn  the  property  to  his  creditors.  The  works 
were  carriet  ^  a  time  in  the  interest  of  the  Honorable 

Peter  McGi  chief  creditor,  but  at  a  heavy  financial 

loss.  In  184*  dr.  Van  Norman  visited  the  works,  and, 
tempted  by  the  appearance  of  great  ore-beds,  purchased 
the  property  for  $21,000.  After  a  large  sum  had  been  ex- 
pended in  fitting  up  the  furnace,  putting  in  machinery, 

'  BitrUell,  oy.  cU.,  pp.  MA-il. 


tr 


52    THK  CANADIAN  IRON  AND  STEEL  INDUSTRY 

ovens,  blo^vnug  apparatus,  erecting  and  repairing  buildings, 
cutting  cordw«K>d  and  making  it  into  charcoal  for  fuel  the 
furnace  was  finally  started  in  1848.  The  result  was  a  bitter 
disappointment;  for,  after  bein^  accustomed  to  using  an 
easily  reduced  bog  ore,  IVir.  Van  Norman  now  had  to  treat 
a  hard,  though  rich,  rock  ore.  A  large  amount  of  charcoal 
had  to  be  used  and  nothing  but  loss  attended  every  effort. 
After  the  iron  was  made,  it  had  to  be  carted  thirty-two 
miles  to  Belleville,  over  roads  so  rough  that  the  wagons 
were  constantly  in  danger  of  breaking  down.    A  road  was 
therefore  oi)ened  to  Ilealey's  Falls  on  the  -iver  Trent,  a  dis- 
tance of  nine  miles;  and  th-  'ron  was  taken  from  there  to 
Rice  Lake  by  steamboat  and  then  carted  twelve  miles  to 
Cobourg  on  Lake  Ontario. 

At  this  time  iron  ranged  in  price  from  $30  to  $30  per 
ton,  and  found  a  ready  sale  at  these  prices.  In  1848  a  rapid 
drop  in  the  price  of  iron  in  England,  together  with  the  re- 
duction of  transportation  rates  that  followed  the  opening 
of  the  St.  LawTence  canals,  settled  the  question  of  making 
pig  iron  at  Marmora  for  .Mr.  Van  Norman,  who  had  to  stop 
the  works  and  lost  most  of  his  investment. 

The  next  proprietors  were  local  people  from  Belleville 
who  formed  the  Marmora  Foundry  Company.   Many  im- 
pavements  were  made  at  an  expense  of  probably  $20,000 
Pig  iron  of  very  superior  quality  was  produced  at  a  cost  not 
exceeding  $15  per  ton.   The  ore  was  rich;  and  three  tons 
yielded  a  ton  of  iron.  Excellent  as  was  the  cast  iron  made 
from  It,  the  toughness  and  ductility  of  the  pig  iron  made  it 
still  more  suitable  for  making  bar  iron.  But  owing  to  some 
difficulty  over  the  payment  of  .stock  dues  by  certain  stock- 
holders, the  works  were  stopped  after  the  first  experiment. 
In  1856  an  English  company  came  into  the  field.    Mr. 
Vernon  Smith,  who  had  just  left  furnaces  at  Woodstock 
New  Brunswick,  was  in  charge.  He  rebuilt  the  old  fumac^ 
and  built  a  new  one  cased  with  iron.   But  apparently  the 
manager  did  not  know  how  to  treat  the  ores  and  the  plant 


THE  HISTORY  OF  THE  INDUSTRY 


53 


was  constantly  behind  the  times.  When  the  hotblast  treat- 
ment and  other  new  processes  were  materially  reducing 
costs  in  Great  Britain,  the  old  mode  of  smelting  by  cold 
blast  was  continued  here;  the  manufacture  of  bar  iron  was 
attempted  without  the  use  of  much  machineiy.  The  pro- 
prietors could  not  compete  with  imported  products  of 
British  ironmasters  who  carried  on  their  operations  on  a 
large  scale,  using  coal  and  improved  machinery.* 

One  of  the  furnaces  was  again  put  in  blast  by  a  Mr. 
Bentley  but  remained  in  operation  only  forty  days.  Mr. 
Bentley's  plan  to  produce  castings  at  a  cost  of  $37.50  and 
to  sell  them  for  $60  per  ton  could  not  be  put  into  practice.' 

In  1867  the  property  passed  into  the  hands  of  a  Pittsburg 
Company,  and  for  some  years  ore  was  shipped  to  Pitts- 
burg.' Iron-making  at  Marmora  was  ended  by  reason  of 
the  high  cost  of  transjwrtation,  inefficiency  of  production, 
and  competition  and  low  prices  in  the  market. 

Meanwhile,  a  furnace  to  smelt  bog  ore  was  erected  in 
Essex  County.  Sufficient  quantities  of  ore  were  found 
within  a  distance  of  five  miles.  The  ore  was  melted  with  a 
mixture  of  hardwood  and  charcoal.  Stoves,  ploughs,  and 
potash  kettles  for  the  settlers  were  made  at  a  foundry  near 
the  furnace.  The  plant  was  operated  until  1838,  when  it 
was  abandoned  through  lack  of  funds  and  ores.* 

In  1837  a  blast  furnace  was  built  at  Marmora  to  use  the 
iron  ore  of  Madoc  Township,  Hastings  County.  The  iron 
produced  w^as  made  into  implements,  ploughs,  potash  ket- 
tles, and  similar  settlers*  stores.  A  drop  in  the  price  of  iron, 
together  with  a  lawsuit,  caused  its  abandonment  in  1844.* 

We  again  hear  of  Mr.  Van  Norman  in  connection  with 
the  iron-works  built  at  Houghton,  Norfolk  County.  After 
his  failure  at  Marmora  he  returned  to  Normandale.    *  bout 

'  OntArin,  Report  nf  Rnyal  Commurion  on  Minet,  1890,  p.  3W. 

•  Canada,  (ietJogical  Surrey,  1863,  p.  109. 

•  llftrtlett,  op.  cit.,  p.  53. 

*  Canadian  Mining  Manual,  1897,  pt.  11,  p.  64. 

*  Ontario,  Report  of  Royal  Commisaion  on  Minet.  p.  389. 


N 


M    THE  CANADIAN  IRON  AND  STEEl  INDUSTRY 

a  «™t  deal  of  tjouble  in  getting  s^tabfeT^l^"^ 
tl.e  ,m„  formerly  made  at  Normandate  waTw  ^  i-  i 
needed,  they  offered  Mr.  Van  Nornl!:^  MSpi^  LL  J.S 
the  m,n  he  eould  make,  provided  the  iron  wL  sui^hu  , 
the  manufacture  of  oar  wheels.   A,  soT ^12^     K 

z:'z  Ir"^  "i  ^'"*"=  c-'y-  W"  t  S"™e'  ^ 

Built,  and  It  was  put  mto  operation  in  1854    T„  .k   ,11 
.n«  .s„rin«  400  ton,  of  i^'^.ere  shi  ".^  bu    the  ii,°I 

had  to  be  sold  elsewhere  for  onlv  "ft?©  n«.  ♦  l  •  , 

l^Iow  the  cost  of  Pi^uetion  The  'Iks  uTi'oh  h".  "" 
about  $30  000.  were  abandoned  andM*  V^lw^ 
career  m  the  iron  business  was  ended  ^  ""^"  ' 

This  was  the  last  blast  furnace  in  operation  in  nr,f    • 
previous  to  1895.  In  the  mean  time.  hTw^lr  se"eSt"° 
posals  were  advanced    In  I87q  a  J    "^^^^^J^'  several  pro- 

pu.ha«,  the  Hay.^k  I™  Si^LX^ra Ttl  *" 
»J«  and  Bessemer  converter  for  nl':;S^r.''^V87^ 
attempts  were  made  to  smelt  iron  ore  with  ernd. V,,.    i 
m.one  of  the  Marmora  fnn^ces.  bu^  C  w^ren^t^""" 

sr:si;;a:n^rssr;£??--- 

mine..   Between  1878  ^d  ira":  W  ELrT «  "' "" 
makinB  arrancemcnts  in  T„^„.    .      ^      ^'^^  *™  »''" 

on  wh.eh  to  IXtu-re^^Tn?!':  mZ^jT  "'  ■"" 
■B.r.le«..p.i,,,.,„  '"  "79  a  eompany  was 

■  /S:^  f».' """  "^  ''■'"'  '""""'■  '»'*  ■»•  -.  p. .«. 

*  ffnd..  1876,  p.  186. 

'  ^<w<arj,  rmw.  vol.  xii,  p  7«) 


^^.^M?^7^?Ki£^'?^;W 


THE  HISTORY  OF  THE  INDUSTRY 


55 


formed  to  construct  and  maintain  blast  furnaces  for  the 
smelting  of  iron  ore  and  manufacture  of  iron  at  Port  Hope 
and  elsewhere  in  Ontario.'  As  no  proposal  apparently  led 
to  any  permanent  results,  Ontario  had  no  iron  plant  in 
operation  in  1879. 

§  4.  Coal  and  iron  ore  were  discovered  in  the  Maritime 
Provinces  as  early  as  1604,  but  it  was  not  until  the  third 
decade  of  the  nineteenth  century  that  a  small  quantity  of 
bar  iron  was  made  in  a  Catalan  forge  from  the  ores  at  Nic- 
taux.*  In  the  year  1825  an  association,  called  the  Ann&po- 
lis  Mining  Company,  was  formed  with  acapital  of  £100,000 
to  manufacture  iron  at  Clementsport,  in  Annapolis  County. 
Besides  a  single  liability  clause  as  protection  to  sharehold- 
ers, the  Government  gave  two  bounties  of  £600  each  for  the 
manufacture  of  a  certain  quantity  of  pots,  kettles,  and  bar 
iron,  as  further  encouragement.  The  associates  purchased 
an  extensive  and  valuable  vein  of  ore  situated  about  three 
and  a  half  miles  from  the  mouth  of  the  Moose  River  and 
another  of  equal  importance  in  the  upper  part  of  Annapolis 
county.  A  large  smelting  furnace,  coal  houses,  and  stores 
were  built  for  £30,000.  The  extensive  forest  at  the  head  of 
the  river  supplied  an  abundance  of  charcoal,  which  alone 
was  used  for  fuel.  Smelting  and  casting  went  on  favorably, 
as  the  iron  produced  proved  excellent  both  for  foundry 
work  and  for  refined  bar  bon.  But  since  the  product  had 
to  compete  with  English  wares,  much  depended  on  the 
economy  and  skill  with  which  the  establishment  vras  man- 
aged.' Unfortunately,  the  company  employed  inexperi- 
enced and  unskilled  men,  not  practically  acquainted  with 
the  manufacture  of  iron.  With  a  powerful  blast,  a  large 
furnace,  and  the  best  charcoal,  not  more  than  13  tons  of 
cast  iron  a  week  could  be  produced.*  Moreover,  as  the  ore 

*  Afonetary  Timet,  vol.  xn,  p.  720. 

*  Nova  Scotia.  Mines  Report.  1877,  p.  43.  •  Ibid.,  p.  4S. 

*  Abraham  Gesner,  Induttrial  Resource*  of  Nora  Scotia,  p.  257, 


m 


50    THE  CANADLVN  IRON  AND  STEEL  INDUSTRY 

was  of  poor  grade,  it  produced  a  poor  quality  of  iron  unless 
It  was  mixed  w.th  other  ores.  Limestone  had  to  be  secured 
from  bt.  John,  New  Brunswick.^  After  theworks  had  been 
in  operation  a  short  time,  they  were  suddenly  closed,  partly 
for  political  causes.2  .t«»i"j' 

They  remained  closed  for  thirty  years,  until  in  1861 
operations  were  resumed  for  a  short  time.  Little  is  known 
of  the  work  for  the  next  decade,  except  that  in  1872  about 

in  1873  the  plant  was  operated  for  six  weeks,  and  in  1874  it 
passed  mto  the  hands  of  the  New  York-Nova  Scotia  Iron 
and  Coa  Mimng  Company.  Apparently  no  iron  has  been 
produced  m  the  section  since  that  time  ' 

The  next  early  attempt  at  iron-making  in  the  Maritime 
Provinces  was  made  m  1827,  when  the  General  Mining  As- 
sociation opened  coal  mines  at  Stellarton.  Pictou  County. 
One  thousand  pounds  was  laid  aside  for  an  experiment  in 
.ron-making    A  foundry  and  a  furnace  were  built  in  1829. 
and  the  smelting  of  several  ores,  mostly  red  hematites,  was 
attempted  ^  The  furnace-man  in  charge  was  an  Irishman 
experienced  m  the  trade,  brought  over  from  Great  Britain, 
but  he  had  g^t  difficulty  in  getting  the  metal  to  flow 
Although  eight   ons  o  iron  we.^  made  daily,  an  excess  of 
phosphorus  and  lack  of  silicon  made  it  hard  and  useless  for 
foundry  puiposes    After  fifty  tons  had  been  made,  the  men 

self,  which  ,t  did  for  all  time  to  come.  In  the  morning  the 
furnace  was  cold  and  the  metal  a  solid  mas.  » 

the^'Jn^Tr'''''T*^'  ^^  *^"  ^°"  °^  ^^'y  ^"d««vors  in 
the  iron  mdustiy.  In  1836  an  iron  ore-bed  was  discovered 
at  Woodstock.  Carieton  County.    Alxjut  1848  the  York 

'  Harrington,  op.  cit.,  p.  9''- 

»  Nova  Scotia.  Mines  Report.  1877.  p.  43. 

Woodman,  op.  cit.,  p.  40. 

H.  S.  Poole,  "Iron  Makine  in  Nova  (v-ntm  "  r^—j-      »#•  •      » 
rietr,  vol.  xii.  p.  204.  '    ^"^^'^'^n  ifmtng  Re- 

'  Canadum  Engineer,  vol.  11,  p.  104. 


THE  HISTORY  OF  THE  INDUSTRY 


57 


and  Carlcton  Mining  Comjjany  obtained  from  the  Provin- 
cial Government  a  subsidy  of  10,000  acres  of  picked  land 
and  expended  $30,000  on  a  blast  furnace.  Within  a  year 
or  two  the  works  were  injured  by  fire.  Repairs  were  made, 
however,  and  the  plant  again  put  in  operation  until  an  ex- 
plosion wrecked  the  furnace  and  buildings  and  ruined  the 
company.  The  works  were  rebuilt  by  an  English  firm  and 
remained  in  operation  for  eighteen  months  during  which 
time  1000  tons  of  iron  were  made  and  8hipi)ed  to  England. 
In  1862  the  property  passed  into  the  hands  of  the  Wood- 
stock Charcoal  Iron  Company.  White  pig  iron  was  made 
and  exported  to  England  for  use  at  Sheffield  in  the  manu- 
facture of  armor  plates.  The  iron  is  said  to  have  been  of 
superior  quality,  but  the  cost  of  production  was  too  great. 
The  ores,  besides  being  difficult  to  concentrate,  were  very 
lean,  and  contained  a  large  proportion  of  phosphoric  acid 
and  sulphur.  The  beds  were  irregular  and  were  soon 
worked  out.'  The  place  was  shortly  abandoned,  and  New 
Brunswick  has  never  since  attempted  to  smelt  ores. 

In  1856  two  furnaces  were  built  at  Nictaux  Falls,  north 
of  Digby,  Nova  Scotia.  But  they  did  not  remain  in  blast 
fo!'  any  considerable  time  because  the  phosphoric  content 
of  the  ores  reduced  the  quality  of  the  iron.  By  1874  the 
people  of  the  ueigh?)orhood  who  wished  to  obtain  brick 
Lad  partly  torn  down  the  furnaces.' 

In  1860  a  blast  furnace  was  put  in  operation  at  Bloom- 
field,  south  of  Digby,  to  smelt  the  bog  ores  of  that  district. 
It  was  in  blast  several  times  prior  to  1880.' 

Following  a  favorable  report  on  the  irvon  deposits  in  the 
Cobequid  Mountains  in  1845,  ironworks,  consisting  of 
Catalan  forges,  one  puddling  furnace,  one  heating  furnace, 
one  furnace,  one  metal  helve,  and  one  blower,  together  with 
ore-crushing  rolls,  were  built  at  Londonderry,  Nova  Scotia, 
in  1850.  The  rolls  and  blower  were  driven  by  water  power 


1  Bartlett,  op.  at.,  pp.  5S5-S6. 
*  Bartlett,  op.  cit.,  p.  539. 


*  Harrington,  op.  eit.,  p.  MO. 


«8    THE  CANADUN  IRON  AND  STEEL  INDUSTRY 
until  1858.   A  small  quantity  of  Ii/ir  .'«,«  .     . 

only  until  1S5,,  when'u  d    La   il  ^n""  '"'^''  ^"' 
blast.     Tk  ores  used  were  nelr  ^  ''"'  ""'  '" 

ironfoundinthenei«hborho<::,"£r:et:^^^^^^^^^ 

plied  almost  any  quantity  of  hardw^  J'^^  l^'T" 

-1.    The  i^n  P«xluc^'prov:^ttv^d"cS  t/h 
powers  of  resistance  to  strain,  and  adaptation  to  an'th*" 
P;^sses  by  which  the  finest  Icinds  of  tnl^,tl^-« 

Londonderry  is  situatedon  the  west  branchof  the  G«.nf 
V.  luge  R.ver.  imn^odlately  on  the  or.  deposits    TL„rr 

:^th?SE:rwrn:rn^^  r^'^  "^-^^^ 

by  waxron    Thrj  ?         '''  communication  except 

com  JnrJ  S  w^',^'  '^[^  •><  -">t--n«  milLy 

So  long  as  charcoal  was  the  only  fuel  available  ^h^.; 

ing  for  und  raismg  ore.  in  building  modern  rotah^  f 
naces   a  .elti„«  furnace  with  rcgLrate"  I'^lZ^ 
Journal  of  the  Iron  and  Stee,  /„^,,  .  1373,  „„  ,^  ^  ^         ^ 


THE  mSTORY  OF  TIIE  INDUSTRY 


50 


and  in  building?  houses  for  workmen.  It  also  acquired  the 
right  to  use  the  Siemens  <»pen-hearth  process  in  Canada, 
built  ten  miles  of  railway  from  the  mines  to  the  plant,  and 
made  an  agreement  with  the  Intercolonial  Railway  for  the 
right  to  use  its  lines. ^ 

In  1874  Dr.  Siemens,  who  was  chairman  of  the  company, 
made  his  first  commercial  exi)eriment  in  the  direct  con- 
version of  iron  into  steel,  but  f^nled  unfortunately.*  When, 
in  1870  and  1877,  coke  ovens  w  t-re  built,  to  use  coal  from 
the  Albion  Mines,  and  the  first  coke  blast  furnace  erected, 
the  old  furnaces  and  the  steel  plant  were  razed  and  a  new 
rolling  mill  put  up  on  their  site.*  Thus,  the  plant  at  Lon- 
donderry was  in  1879  the  most  pretentious  endeavor  that 
had  ever  been  made  in  the  iron  and  steel  industry  of  Nova 
Scotia. 

A  few  years  earlier  the  Pictou  Coal  and  Iron  Company 
had  been  formed  to  mine  coal  and  iron  ore,  to  manufacture 
iron,  and  to  construct  a  rnilway  from  the  mines  to  some 
point  on  the  Intercolon  uil  Riiilway .  Extensive  explorations 
were  carried  on  and  valuable  discoveries  of  Bessemer  ore 
were  made.  But  the  company  could  not  raise  sufficient 
capital;  progress  was  checked,  and  the  once  bright  prospect 
faded  away.* 

§  5.  Besides  the  early  attempt  to  establish  the  manufac- 
ture of  the  primary  products,  pig  iron  ad  steel,  in  Canada, 
the  manufacture  of  finished  goods  hn  ^  already  been  intro- 
duced. Incidentally,  it  has  been  noted  that  many  of  these 
plants  carried  the  manufacture  on  to  the  finished  stage. 
The  plant  at  Lyndhurst  i)roduced  bar  iron  as  early  as 
1800;  those  at  St.  Maurice  and  Normandale  produced 
kettles  and  other  casts  demanded  by  the  early  settlers. 

'  Journal  of  the  Iron  and  Steel  Institute,  1875,  no.  ii,  p.  586. 

*  Woodman,  np.  eit.,  p.  15.1. 

*  Canada,  Report  on  Mining  ond  Metallurgical  Induttfiee,  1908,  p.  539. 

*  Canadian  Engineer,  vol.  u,  p.  104. 


60    THECVNADMN  IRON  AN' F>  STEEL  INDLSTRY 
The  plant  at  I^...,l„nderry  a.lopted  the  same  policy     If  U 
imp..rUmt  t«  nuu-  that  it  w,k  f  I.,,.,  pbnt.s  wlu/h  caH«    he 
pn.c..s  through  ,o  the  f  n.|.in«  .stag.  •  „     l.adThT^l  ! 
est  sucTss  and  r  .Trnaueiu-e.  ^ 

But  in  the  husi  two  decades  of  the  nerio.1  uifl.  «.!.:  u 

.1  hm,h«l,mHl„e(.  alone  be,,„„e  .-ide.p.^id.  The  Z^ 
u/acturcof  munyof  the  more  l.id,|y  fi„,i„,,  „' ,  '"  , 
;- .„d  „,«.,.  ...h  „  boiler,.  o„;/e,*;ri:t  '^L"X 
tools,  foundiy  work.  tack.s.  rivets  bolts  nn,  n  V 
gradually  developing  with  the  pi^g^^'o  '  L  00!^ 
and  asMimrngsome  importance.  Our  attention  may  the^* 

Tik^th^h  'T "  "7"'"^  *"  "'^  -ningriiTd;  r 

Like  he  other  branches  of  the  iron  indust^^.the  rollL 
m.II  industry  seems  ».  have  appeaml  in  Qu.CeaZl 
than  m  the  other  I'rovinrcs.    IWious  to  l^Tv-u 
wroughtnails  we.  used  almost  exclu^^VrnC^^^^^^^^^ 
manufacture  of  cut  shingle  nails  had  been  started  in  Men 
tr^al  ye  the  larger  cut  nails  u .  .  still  imported  into  rn^r" 
Canada  from  the  United  St.»te.s    li»t  in  1857  Xg  X 
know„  as  the  Vic-toria  Ironworks,  and  later,  t^e  Mon^ 
Rolling  Mills,  were  established  at  Montr«»l     \tZ7u- 
the  .mports  of  sheets,  hoops,  and  naS^dTlis  'j  l„d 
the  mills  tunied  out  the  rest  of  the  supply,      n  ,8M  the 
puddling  and  rolling  mills  were  capable  oLupplZ  the 
Province  with  nails  and  no  less  than  twelve  tons  of  n"! 
P  ate  we.  turned  out  daily.   Sci.p  i  Jn  wL  uZ  at  firs^ 
bu  ta^  the  supply  w,«  inadequate,  puddling  furnaces  we.^ 
added  to  work  up  imported  pig  iron.   As  much  machinei^ 

»•  I .  Day.  English  America,  pp.  17»-85. 


pTwz^iT^: 


THE  111>T0R\    OF  THE  INDUSTUV 


61 


in  18.'>1.'  In  185.5  an  rstahHshment.  the  only  one  in  Can- 
ada, was  opined  in  Kinffstun  to  make  axU's  and  wheels  for 
railway  carriuj^es.'  The  present  B.  (irt>ening  wire  plant  of 
Hamilton  had  its  inception  in  1859.'  Almiit  18fiO  Messrs. 
Gzowski  and  Maci)herson,  of  Toronto,  started  a  lar^e  roll- 
ing mill  in  that  city  to  re-roll  iron  rails.  Some  bar  iron  wjis 
also  made  out  of  serap.  In  1873.  however,  the  place  was 
closed  and  dismantled  l)ecausr  o  vhe  substitution  of  steel 
for  iron  rails.  In  1864  the  Great  Western  Railway  Com- 
pany erectetl  a  rolling  mill  at  Hamilton  to  patch  and  re-roU 
iron  rails.  This  continiie<l  in  operation  until  '879,  when  the 
plant  was  leased  to  the  Ontario  Rolling  Mill  Company  for 
the  manufaci  re  of  bar  iron,  tiuil  plate,  and  fish  i)hite  made 
out  of  scrap  iron. 

In  1866  the  Steel,  Iron  and  Railway  Works  Company  of 
Toronto  was  oi^anized  to  operate  a  patent  process  for 
the  manufacture  of  railway  crossing  points  and  for  putting 
steel  ends  on  railroad  rails.  Operations  were  confined  to 
the  palchinr  of  iron  rails  and  ihe  manufacture  of  sone 
forcings.    Tilt     ntrodiiction  o'  steel  rail-  d  the  works 

foi  a  time,  but  ihey  were  reopt^ned  in  1'  ,    •  mergei 

with  the  r;uia<ia  Car  and  Manufacturing  •'  .•  i  which 
was  chartered  to  manufacture  and  lease  rt*i  •.,  •;>••->.  The 
Ontario  Government  entereii  into  an  agrecinent  with  the 
car  <  .trnpany  to  lease  the  labor  of  all  prisoners  at  the  Cen- 
tral Prison,  Toronto,  for  a  term  of  seven  and  a  half  years. 
The  Government  was  to  furnish  sufficient  workshop  space, 
with  foimdations  for  machinery  'id  other  j  <•  lancnt 
structures,  and  also  heat  and  light.  The  boilers  iv\  engines 
and  shaftings  requ'rcd  for  motor  purposes,  the  engineers 
and  firemen,  and  the  fuel,  were  to  be  provided  by  tiie 
company.  The  (Government  was  to  n^eive  56to60ce  t:< 
a  day  for  the  use  of  each  prisoner.   As  the  prison,  in  cours . 

'  Canadian  Minmg  Manual,  X.^iili,  pp.  851-58. 

•  J.  H.  L.  Morfian.  Tariff  llixtory  of  Canada  prior  to  1879,  p.  103. 

■  Canadian  Mining  Manual.  1895.  pp.  857-56. 


i 


e«  TIIE  C.\N.VDIAN  IRON  AND  STEEL  INDUSTRY 
of  construction,  was  not  suitable,  it  w^w  altered  for  fh- 
purpose.  Several  railway  sidings  and  a  fo  getith  four 
W  Whamme.,  along  with  the  neccsl^^^lt^' 
and  plant  for  the  manufactu.^  of  locomotives  ca^X 
and  Ian?e  forgings  were  installed.  Small  hammers,  a  S 
foundry,  equipped  to  turn  out  120  car  wheels  ^r  dly  a 
arge  found^^  for  soft  castings,  and  shops  and  m^h^e'r^ 
for  malung  nuts,  washers,  and  bol^s.  togetheT^^^ 
var^ty  of  u.n-  and  wood-working  tools.  Ze  alsoIid«l 

nt^retaldt'^'  '^'"  '^^  ^^  '^  «"  ^^^^  »>'^- 
But  about  this  time  the  depression  of  the  seventies  scf  in 

uuutimg  Hio  to  2()0  cars  the  company  collaosed  An,!  tu^ 
place  was  sub.soqucntIy  sold  and  ImlJ^^  ""^  '^' 
Nor  were  the  Maritime  Provinces  bn,  k  ward  in  the  nro- 
oucfon  of  fin  shed  products.  In  18.50  the  first  pLt  of  t^ 
Portland  Rolhng  Mills  was  built  in  St.  John  Bar  Lin 
na.  and  sp.ke  mills  wc«.  added  in  1860.^  in  .  .74thepknt 
of  the  present  Coldbrook  Rolling  Mill  Company  of  St 
John  was  begun.  In  187.3  this  company  was  foL^  w-  th  a 

pfa  e  riv^'rr"  r*  ^'^''"^  railway'tn.Zer 

thelntercolonialRailway.a^danaTJX^^^^ 
with  .t  was  situated  a  mile  or  two  away.  oS  iron  ra^und 
scrap  .ron  wc^,  the  raw  material,  us^.   TheT>r^  we,^ 
operated  for  several  years  and  then  lay  unus«l  untTaW 

mZT^^TZ  .*""'  *"  "'•'"*  '"^^  ■"•"'•^  '^""^e  one  of  the 
most  important  .ron  and  steel  plants  in  Canada    In  1872 
at  a  time  when  a  large  demand  for  railway  iron  „t2 

'  IJarllrIf,  op.  rit..  pp.  532  34 
j  r«rmrfm„  Mi„„.g  Hanml.  im.  p.  Ut. 
.  '  BarlJett.  op.  nt.,  p.  u». 


?2'«»:!i*^«-'^'5i. 


THE  HISTORY  OF  THE  INDUSTRY 


63 


by  the  building  of  the  Intercolonial  Railway,  a  plant  was 
opened  at  New  Glasgow  by  Mr.  (Jraliam  Fraser  for  the 
manufacture  of  marine  and  railway  forgings.  Mr.  Fra.ser 
manufactured  railway  spikes,  springs,  and  axles  out  of 
pcnii)  iron  ana  <li(l  a  general  forge  business.  After  two  steel 
hummers  had  l)ev,n  installed  to  handle  an  increasing  trade, 
the  firm  was  incoqwrated  as  the  Nova  Scotia  Forge  Com- 
pany. In  1878,  in  order  to  secure  water  and  more  room  for 
extensions,  the  plant  was  moved  to  Trenton,  where  the 
work  was  carried  on  very  successfully.* 

§  6.  Thus,  by  1879.  the  Canadian  iron  industry  had  not 
assumed  any  great  importance.  Ontario  could  boast  of  no 
pig-iron  producing  plant  and  no  very  imiwrtant  rolling 
mills.  Quebec  was  a  little  better  off,  with  a  few  fairly  large 
r  ng  mills  ami  thre«-  small  blast  furnaces.  But  the  Rad- 
nor forges,  renewed  at  a  later  date,  were  temiK)rarily  closed, 
and  the  forges  and  furnaces  at  St.  Maurice  and  Yamaska 
were  on  the  eve  of  abandonment.  The  plant  of  the  Canada 
Titanic  Iron  Company,  already  closed,  was  dismantled  in 
1880.  The  only  important  plant  in  Canada  was  that  at 
Londonderry-,  where  in  the  seventies  the  Steel  Company  of 
Canada  had  built  a  coke  blast  furnace  and  Siemens  open- 
hearth  furnaces,  as  well  as  extensive  finishing  mills.  Even 
this  attempt  to  establish  the  iron  industry  in  Canada  was 
almost  a  failure,  for  the  company  went  into  the  hands  of  a 
receiver  in  1883.  The  Nova  Scotia  Forge  Company  as  yet 
conducteil  business  only  on  a  small  scale,  but  it  had  begun 
its  successful  career.  Other  plants  ra.mufacturing  iron  and 
steel  products  were  numerous,  but  their  ojwrations  could 
not  be  regarded  as  comprising  an  industry  o{  any  distinc- 
tion in  the  country.  In  short,  the  national  policy  of  pro- 
tection introduced  in  1879  hatl  an  almost  open  field  in  its 
effort  to  stimulate  a  Canadian  iron  and  steel  industry. 
'  Indiulrial  Canada,  vol.  vi,  pp.  387-89. 


CHAPTER  IV 

ELEMENTS   OF   SUCCESS;    AND   FAILURE 

§  1.  Natub/  .Yone  asks  for  the  reason  of  this  back- 
wardness in  the  Canadian  iron  and  steel  industry.  The 
previous  chapter  has  described  in  more  or  less  detail  the 
results  of  aU  known  attempts,  down  to  1879.  to  produce 
iron  m  Canada;  for  it  is  through  analysis  of  the  small  sue 
cesses  and  failures  that  the  fundamental  conditions  of  an 
mvlustry  are  revealed. 

These  conditions  of  success  and  failure  may  be  conven- 
iently divide*!  into  two  general  groups.    The  first  group 
mcludes  the  technical  and  more  fundamental  conditions 
such  as  the  supi)ly  nnd  chara.'tcr  of  ores,  fuel,  and  labor' 
the  presence  or  abs*  nc.  of  technical  experience,  managerial 
abiiHy.  capital,  and  (he  extent  and  nature  of  the  market 
Smco  each  of  these  conditions  is  fundamental,  they  will  be 
discusswl  at  greater  length  in  later  sections  of  this  chnj.ter 
Another  group  of  wmditions.  cr  factors,  might  be  in- 
cluded under  the  term  "conunercial  policy."  They  have  to 
do  with  the  tariff  sy.stem  or  any  other  device  for  the  artifi- 
cial nourishment  of  an  industry.    As  the  success  of  the 
commercuil  iK>licy  depends  on  those  c-onditions  which  have 
been  cla.ssificd  as  technical,  the  con.sideration  ..f  the  tech- 
nical conditions  of  the  Camulian  iron  and  .steel  industry 
should  receive  chief  attention.     It  is  in.jM)rtanf.  however 
to  outline  the  actual  tariff  jK.liry  i„  force  throughout  this 
early  peruwl  of  industrial  history,  before  referring  to  tech- 
nical conviderations. 


§  2.  The  history  (.f  Can.idian  commercial  iK)li(y  may  l>e 
conveniently  .livided  into  thri-e  {Hriods.  The  first,  ending 


ELEMENTS  OF  SUCCESS  AND  FAILURE        65 

in  1846,  covers  the  period  of  French,  and  Inter  British,  con- 
trol  of  the  colonies.  So  long  as  France  and  Britain  ,,'.ive  tl>e 
colonial  products  preferential  treatment,  thoy  had  the  priv- 
ilepe  of  fixing  the  tariff  on  goo<is  entering  the  colonies  from 
foreign  nations.    In  1W2  these  "Imperial  Duties"  were  as 
high  as  7i  per  cent  on  pig  iron,  15  i)er  cent  on  ca-stings, 
nails,  etc.,  and  20  to  .'JO  per  cent  on  wire.   Additional  cus- 
toms duties  were  imposed  by  the  colonies  on  imfwrts  from 
foreign  nations.    It  is  scarcely  neoessai^-  to  say  that  the 
British  manufacturers  supplied  the  greater  part  of  the 
Canadian  demand.  Veiy  little  iron  was  produced  in  Canada 
Ix-fore  1846,  and  at  the  same  time  imports  from  the  United 
States  were  negligible.' 

When  England  repealed  the  Com  Laws  in  1846,  she 
threw  open  the  home  market  for  grain  to  foreign  as  well  as 
colonial  prtKliuers.    The  conscfpionce  of  England's  action 
mis  a  severe  dei)rcssion  in  the  colony  in  1847.    Canada 
immediately  claimed  the  right  of  determining  the  rMes  of 
duty  on  impoHed  g(xxis,  and  in  1847  Great  Brit.nn  saw  fit 
to  grant  this  pri\ilege.    The  so-called  "ImjH'rial  Duties" 
were  immediately  repealed  by  the  Canadjis.  and  by  the 
Mantime  Provinces,  and  now  customs  tariff  acts 'were 
passed.^  As  all  iron  and  steel  goo«ls,  even  those  fron)  Great 
Britam.wcre  includeil  by  the  Canadas  in  a  1  per  cent  list. 
Glasgow  iron  founders  immediatelv  objected,  claiming  that 
their  growing  iron  trade  with  Canada  would  l>e  ruinefl. 
The  British  Government,  upholding  the  value  of  refipro- 
cal  exchange  of  products,  claimed  that  such  a  policv  would 
be  injurious  to  the  trade  of  both  Great  Britain  and  Can- 
ada.'   The  colony,  however.  jK^rsisted  in  her  supposedlv 
evil  ways  until  the  principle  of  Canadian  autonomy,  at 
least  on  this  fwint.  was  firmly  hniged  in  the  British  public 
mind.   In  1849  Caniula  advanced  the  rate  on  the  list  of 
raw  materials,  including  pig  in)n  and  iron  ore.  from  1  to  2^ 

]  I'"'!!!'''-^^''*-  ^"'""'^""l  Relationtoflhe  VmledStaUs.  Is  W.  p.  1C3 
10-11  \k..  1S-J7.  .hup  M  .  Morg^^,.  „^  ^^  p  73/         • 


■J.  f*! 
'■;  |!» 
(1   -»- 


60    THE  CANADLVN  IRON  AND  STEEL  LNDUSTRY 

per  cent,!  In  1853  scrap  iron,  bar  iron,  pig  and  sheet  iron 
wore  kept  on  this  Hst,  notwithstanding  the  general  reduc- 
tion of  dutios.=  Ry  the  Recii)rocity  Treaty  of  1854.  with 
the  Tnited  States,  ores  of  all  metals,  including  iron,  were 
iidnnttedfromamiexiwrtedtothe  United  States  free  of 
duty.'  In  1858  the  duties  were  raised  again;  on  bar  iron, 
wrought  and  cast  steel,  plates  and  hoops,  to  5  per  cent;  on 
rolling-mill  products  and  iron,  n.e.s.  (not  elsewhere  sjici- 
fied),  to  20  per  cent.  Pig  iron,  scrap  iron,  coal,  and  coke 
were  put  on  the  free  list.«  By  a  new  revision  in  1859  the 
5  per  cent  list  was  advanced  to  10  per  cent,  other  iron  du- 
ties remaining  the  same.* 

In  the  Maritime  Provinces  the  duties  on  iron  and  steel 
were  considerably  advanced  in  a  similar  manner,  so  that 
when  Confederation  was  proi)ose«i  in  1807.  the  duties  im- 
posed by  the  various  Provinces  were  as  follows:  — 


Arliclr  Canniitt 

Iron  and  hardware      il)',  „ 
Iron  bars  and  rods      10 
Iron  plates  10 


Nova  Srotia 

**a  ,0 
& 
5 


N>w  Uruniwick    Prinw  Edward  Id- 


15 
15 


7J 


Thas,  on  a  large  volume  of  goods,  Canada  was  imposing 
higher  duties  than  were  the  Maritime  Provinces.  Pending 
the  settlement  .)f  the  negotiations  for  Confederation,  the 
duties  were  abolished  in  1867. 

With  the  organization  of  Confederation  accomplished 
the  new  Government  set  al>out  the  preparation  of  a  new 
tariff.  In  1868  iron  bars,  rods,  sheets,  plates,  nails,  spike 
rod.  wrought  stet'l.  iron  and  steel  slabs,  blooms.  l)illets.  and 
ingots  were  placed  on  a  5  per  cent  list.  Pig  irf)n.  .scrap  iron 
and  steel,  iron  ore.  cast  steel,  rolling-mill  pro<lu(ts.  coal  and 
coke,  were  admitted  free  of  duty.  The  "Not  el-sewhere 
.si)ecified"  list  was  charged  15  per  cent.«  In  1870  blooms 
and  billets  were  put  on  the  free  list,  but  a  duty  of  50  cents 


'  aiohf,  1849.  April  18, 

'  llnd.,  p.  ;j. 

*  Ilnd..  1850.  chap.  «. 


•  Morpin,  op.  nV.,  p.  W. 

•  W  \  ic,  IK-IH,  rluip.  7fl. 

•  ai  Vic.  I80«.  chap.  44. 


ELEMENTS  OF  SUCCESS  AND  FAILURE        67 

per  ton  was  imposed  on  conl  and  coke; '  this  was  repealed, 
however,  in  1871.*  No  further  revision  affectinj?  iron  and 
steel  duties  seems  to  have  been  made  prior  to  1879. 

The  duties  on  iron  and  steel  products  were  very  low;  the 
tariff,  as  a  matter  of  fact,  was  a  revenue  tariff  providing 
only  incidental  protection.  The  year  1859  had  seen  the 
nearest  approach  to  protection  in  the  form  of  duties  of  10 
per  cent  on  a  number  of  products,  especially  bar  iron  and 
cast  and  wrought  iron,  and  of  20  per  cent  on  rolling-mill 
products.  Pig  iron,  scrap  iron,  iron  ore,  and  coal  were  ad- 
mitted free  practically  throughout  the  period  in  question. 
Some  have  claimed  that  the  beginning  of  the  protective 
policy  may  be  found  in  the  tariff  of  1859,  and  certainly 
in  Ontario  and  Quel)er  a  definite  opinion  existed  in  favor 
of  such  a  policy.^  Fur  instance,  a  circular  was  sent  out 
about  1871  asking  for  an  increase  of  duties  on  the  5  per 
cent  list  to  7J  per  cent,  and  for  a  duty  of  15  per  cent  on 
pig  iron.*  The  duties,  however,  were  never  high  after  the 
reduction  in  1867,  aud  the  tariffs  could  not  be  regarded  as 
protective  measures. 

It  is  not  difficult  to  determine  the  relation  between  such 
a  tariff  and  an  industry  which  bar<^'y  maintained  an  exist- 
ence throughout  this  early  period.  The  production  of  pig 
iron  had  to  be  conducted  on  its  own  merits  at  practically 
all  times.  Only  one  plant,  which  produced  iron  of  an  ex- 
traortlinarily  g«x)d  quality  used  for  special  purposes,  was 
regularly  in  operation.  Otherwise,  the  continuity  of  the 
industry  was  maintained  only  by  new  enterprises  taking 
the  place  of  the  previous  failures.  In  spite  of  the  fact  that 
some  assistance  was  given  to  other  lines  of  production, 
purijosely  or  not,  the  greatest  developments,  even  in  the 
finishing  industry,  came  between  1808  and  1879.  These 
were  owing  largely,  as  we  shall  see,  to  the  increased  demand 

«  33  Vic,  1870.  chap.  ft.  >  Ibid..  1870,  chup.  10. 

•  K.  I'orritl,  Siity  Yearx  of  I'roltction  in  Canada. 
Iron  Aye,  vol.  xin,  IVbruary  7,  p.  7. 


41      !, 


If      '• 


fci 


^ 


"ir 


68    THE  C.\N.U)LYN  IRON  ASD  STEEL  INDl'STRY 

for  railway  supplies,  rather  than  to  the  duties  which  had 
alre^idy  In^n  reduced  by  tlie  Act  of  1867,  and  were  only 
partially  reiniposed  by  the  Act  of  1868. 

It  would  l>e  iMope  difficult  to  estimate  what  might  have 
hapi)ened  had  the  duties  l>een  higher.  The  fact  that  they 
were  not  higher  may  have  handicapped  several  projects 
The  production  of  iron  at  Annajwlis  in  1825,  at  Marmora 
in  the  forties,  and  at  Moi.s:c  in  the  seventies,  was  evidently 
checked  by  im{)ortation.,  (,f  British  iron  goods.  Yet  other 
conditions,  such  as  the  high  cost  of  production  and  some- 
tunes  the  low  price  of  iron,  were  the  real  factors  checking 
the  growth  of  the  iron  industry  of  Canada. 

§  3.  To  these  other  factors  we  may  now  turn  our  atten- 
tion. Probably  the  one  of  greatest  importance  in  the  de- 
velo,,nient  of  the  industiy  is  th.-  supply  of  iron  ores.  As  we 
have  seen,  a  noticeable  feature  of  Canadian  ores  is  thc.r 
great  numl)er  and  •/ancty.  It  look  a  long  time  to  discover 
them,  however;  and  it  is  imiwrtant  to  note  that  only  a  few 
of  the  ,lc,wsits  worked  at  i)res*„t.  those  at  Ix,ndolidcrr>', 
Nutaux.  and  Rjulnor.  were  known  l»efore  1S79.  Lock  of 
government  ex])loration  and  of  private  initiative  and  jkt- 
severaiu-e,  together  with  the  general  lateness  of  Canadian 
developnu>nt,  account  for  the  failure  to  discover  ores. 

(>f  the  on  deposits  that  were  known,  few  were  .satis- 
fa(t<)rv-.  The  U-st  were  not  found  in  swtions  of  the  country 
within  a  n-asonable  distance  of  the  markets  at  that  time 
Those  in  eastern  Ontario  were  heaxy  in  sulphur  and  had 
to  l>e  most  carefully  worked  to  pr'.Kluce  a  good  grade  of 
iron.  Those  used  at  Houghton  contained  too  much  phos- 
plu.rus  to  pnxluce  the  (pmiity  of  chilled  iron  demanded  at 
that  tune.  Some  ort^s  in  Quebec,  as  at  Bale  St.  Paul,  con- 
tained too  much  .suli)hur,  and  the  titanium,  which  was'of  no 
special  value  to  the  iron,  necessitated  the  use  of  an  execs- 
.s!ve  amount  of  charcoal  in  smelting.  As  the  ore  r.t  WtKxl- 
slock  v.us  veiy  lean  and  contained  too  much  phosphorus, 


ELEMENTS  OF  SUCCESS  AND  FAILURE 


69 


llie  cost  of  production  of  iron  was  too  great,  notwithstand- 
ing; the  excellent  quality  of  iron  made  and  the  special  pur- 
IH)se  for  which  it  was  used.  So,  too,  the  phosphorus  in  the 
ore  used  ut  Stellarton,  Nova  Scotia,  in  1828,  made  the  iron 
too  hard  for  foundrj'  pur[)oses.  Moreover,  while  in  eveiy 
country  where  the  manufacture  of  iron  was  entered  into, 
a  judicious  mixture  of  ores  was  used  to  bring  about  a  pro- 
duct suitable  for  consumption,  these  local  Canadian  indus- 
tries were  unable  to  secure  ores  of  different  kinds. 

Even  where  the  mines  were  satisfactory,  the  cost  of  min- 
inj:  usually  amounted  to  $1  per  ton  in  the  most  favorable 
circurastant«s.  Inexperience  of  the  mine:  s  and  poor  man- 
aj^cnient  did  not  improve  conditions.  The  mines  in  On- 
tario, which  were  usually  open  cut,  could  not  be  worked  in 
winter;  those  of  Nova  Scotia  were  too  deep.  Nevertheless, 
the  quality  of  certain  ores  permitted  the  production  of  a 
si)ecially  good  quality  of  iron.  The  product  of  the  London- 
derry plant  made  excellent  cast  iron;  that  produced  at  St. 
Maurice  and  Radnor  was  not  surpassed  even  by  Swedish 
charcoal  iron. 

But  even  the  finest  of  these  ores  were  insufficient  to  sup- 
ply a  ])crmanent  industry,  especially  since  the  deposits 
were  usually  irregular  and  small.  The  most  successful  of 
early  enterprises,  those  at  Normandale  and  St.  Maurice, 
li.iil  Huully  to  be  given  up  Ixjcause  the  beds  within  reach 
were  rxhuusted.  Even  where  other  factors  were  the  imme- 
diate cause  of  abandonment  of  iron-making  establishments, 
the  scarcity  of  ore  must  shortly  have  placed  a  check  on 
oi)eralions. 

Allied  to  this  question  of  exhaustion  of  ore  deposits  is 
that  of  the  proximity  of  the  ore  to  the  plant.  The  lower  the 
grade  of  ore,  the  greater  the  cost  of  transportation  of  the 
ore  {XT  ton  of  i»ig  iron  produced.  Likewise  the  distance 
from  the  i>lant  of  a  comparatively  rich  ore  might  easily 
place  it  ontside  tne  range  of  commercial  value.  In  cases, 
as  at  Lyndliurst.  the  plant  w<is   built   loo  far  from  the 


-  _;,  ^  :^ 

i   f^.    ■-■-?' 

70    THE  CAN,\DIAN  IRON  AND  STEEL  INDUSTRY 

der)osit.s   in  the  first  place.  More  often,  as  the  deposits 
Here  exhau.st.Hi.  the  ore  had  to  be  Lronght  from  greater 
and  ^.ater  d..stanc..s  until  finally  its  use  became  quuTim 
pnicticable.  and  operations  had  to  be  abandoned 

§  i.  Fluxing  materials  are  exceptionally  abundant  in 
runada:  so  absence  of  those  di.l  not  hinder  fhe  earCa^ 
i.«hmcnt  of  an  iron  and  steel  industo^.  The  supply  oTfud 
uuis  ess  sat.sfuctoo^.  As  a  matter  of  fact,  there  nliel  the 
greates  d.ffieulty  with  which  the  indust^^  espe^  dTy t 
certain  ocaht.es,  has  had  to  contend.  Before  the  introdu^ 

thTjL  r  "'  '^'^"'"'""^  «>«'.  the  lack  of  beds  of  an- 
thracite coal  m  eastern  Canada  limited  the  iron  industry 
to  the  manufacture  of  charcoal  iron.  Yet  v.  hile  Canada  is 
we    supplied  with  ex^-llent  ha«iwoods  for  mL^ngta  ! 

tTnt  if  thr?  "'  ^'^7'  '"'"^  ^'•'^''"  '^— ble  dis- 
tan  e  of  the  furnaces.  In  certain  sections  the  charcoal 
could  l>e  obtamed  cheaply  from  the  settlers,  who  m^e  it 
dunng  the  other,  ise  idle  winter  months,  but  in  oth'r  c^ 
t  was  necessao^  to  secure  a  government  grant  of  w^! 
land  o  msure  a  steady  supply.  Before  tt  end  o"^e 
Trict.";  '":*"''  *''  ^^"^"^  f°^  ^'— '  iron  wit 

!nIT;  ,  '"'^  ^  '^"^  '^'  "'"«  «f  charcoal  was  often 
an  absolute  de  nment  to  the  indust^^.  The  use  of  bitum" 
nous  coke-producmg  coal  gradually  altered  the  situat^n 
jr.  Nova  bcot.a.  but  only  near  the  end  ol  the  period t"!^ 

Ontario  is  unfortunately,  absoh.tnly  devoid  of  ooaJ  and 
her  distance  from  coal-fields  ha,  always  phu^  herT!a  d^ 
advantage  for  the  production  of  coke  iron.    In  the  eart 
penod  the  transportation  of  coal  or  coke  to  the  ores  wt 
usually  .j,.,t    .mpracticable  unless  the  duty  was  remov^ 

N  vlV    •'  fo        .     *'^''*  "'''^''  ""  ^«^  ^""-""l  from 
Nova  Sc-ofa  to  Ontario  were  very  high,  especially  in  winte^ 


ELEMENTS  OF  SUCCESS  AND  FAILURE        71 

when  the  St.  I^wrence  River  was  closed  to  navigation. 
Consequently  it  was  almost  impossible  for  Ontario  to  com- 
pete with  Nova  Scotia  in  the  production  of  iron,  and  espe- 
cially with  the  Unite<l  States  and  England,  where  the  ores 
were  in  close  pro>dmity  to  a  permanen}  source  of  g<x)d 
fuel. 


S  5.  The  lack  of  transport  service  was  another  difficulty. 
Mention  of  trans{y)rtation  has  been  made,  already,  in  the 
discussion  of  carrying  ore  to  the  furnaces,  which,  of  course, 
usually  means  the  carrying  of  ore  to  the  coal  deposits.  In 
this  early  period,  the  blast  furnace  was  commonly  built 
near  the  ore  deposits,  the  fuel  was  secured  from  neighboring 
forests  or  coal  mines,  or  brought  from  a  distance,  and  the 
products  shipped  some  distance  to  market.  In  the  latter 
contingency',  railways  or  canals  or  other  facilities  fortrans- 
p<irt!iMon  were  of  very  great  importance.  In  early  years 
the  !;i(k  of  car-^ymg  agencies  gave  rise  to  difficulty  at  Mar- 
mora and  Uiidnor.  In  certain  cases  they  were  adequate. 
The  I  (hint  at  Normandale  was  close  enough  to  Lake  Erie 
t<  p  r  iiit  !i^  Dwner  to  .ship  his  wares  to  Canadian  Lake 
p<>rts,  to  Buffalo,  and  even  to  Chicago.  The  Intercolonial 
Ra'lway  gave  the  plant  at  Ix)ndonderrj'  a  new  market  and 
a  new  outlet,  and.  at  the  same  time,  a  more  direct  and 
a  cheaper  supply  li*  coal  from  the  Springhill  and  Pictou 
collieries. 

In  some  respects  the  iron  industry  was  adversely  affected 
by  the  increase  of  transportation  facilities.  The  develop- 
ment of  the  canal  system  of  the  St.  Lawrence  did  not  im- 
prove the  situatv  i,  for  British  iron  was  let  in  at  such  prices 
that  it  was  im  siblc  for  the  Canadian  producer  to  com- 
pete in  the  On^rio  market.  Later,  when  iron  rails  were 
riipldly  supplanted  by  heavier  steel  rails,  plants  that  used 
iron  rails  us  raw  material  had  either  to  close  down  or  to  use 
pig  iron  or  other  scrap  iron.  Thus,  the  influence  of  trans- 
portation facilities  in  permitting  the  product  to  reach  a 


m 


W    THE  CANADIAN  IRO>    AND  STLEL  INDISTRV 

market  in  s„pplyin«  raw  ...aterial.and  ev.-n  f  he  protection 
which  the  l,„.k  ..f  ,r.„.,...t,,.„„  f^i,.,,,,  ,  ;    -^^n 

home  market,  wh...  other  factors  .e.-  favorahlc.  can  harTliy 
be  overeHtimafM  in  respecrt  to  thi,  curly  ,H>ri.  ..1.  ^ 

§  0.  The  IaJ)or  supply  seems  to  have  given  ore  ision  fnr 
adchtionaJ  difficulty.  It  i.  said  that  at  XoTn.an.^e  hemen 
were  arrogant  and  unruly,  went  on  a  strike  on  the  |^«t 

u  Au  ^^'»""^'  *««es  were  relatively  low  because 
much  of  the  work  could  be  done  during  thelinrer^  t^ 
habUanU,  but  m  most  cases  day  wages  we.^  50  cents  hlher 
than  m  oth,  r  countries..  At  Londonderry  ordL.^  ll" 
ers  recency  «,  to  $1.30.  n.iners  8l.50^d  fuZ-^men 

enced  labor  and  the  al>.sence  of  managerial  ability  Xch 
Ks  of  farst  .mportanc  in  the  iron  anTsteel  mwl^tu^' 
were  Pnmary  factors  in  retarding  its  growth.  As  theT-* 
dustiy  was  new  to  the  countiy.  ,he  workn.en  had  to  i 
brought  from  abroad  until  Canadian.s  could  be  trai^  T^ 
nduce  men  to  leave  remunerative  employmentTn  old  J. 
tabhshejl  smelfng  centers,  it  was  nec-essar,  to  offer  them 

Wucboc.  at  St.  Maurice,  the  French  soldiers  had  to  Im-  calle,! 
mto  serv.  o.  and  workmen  had  to  1.  brought  f n^m  Fr^.^ 
So.  too.  m  (Jntario.  at  Lyndhurst  and  Marmora,  inex^rf-' 
once  a„.l  meffic.ency  left  che  plants  far  l>chind    he  time" 
Owmg  to  a  lack  of  metallurgical  knowledge,  the  aS 

o,^reartl.  f      ^^"'"'-    ^''''  "*  ^"*  '•*^-  "'«  Siemens 

Z^.tTluT::'''  "^""^  '^''T-'-'  ^y  -  -«n  who  knew 
nothiP  ,  of  the  theory  or  practice  of  stcl-making. 

'   flarrinfffon,  op.  rii.,  pp.  244-4S 


KLEMENTS  OP  SrCCESS  AND  F.ULURE        7S 

Even  where  lahor  was  secured,  men  gathered  together 
from  a  nunil>er  of  places  in  foreign  countrieti  had  to  learn 
how  to  work  together  and  to  make  use  of  n;aterials  to  which 
they  were  not  accustome*!.  Thus  even  experienced  men 
made  many  tnintakes.  Ls  it  not  a  wonder,  then,  that,  with 
htck  of  skilled  and  cheap  labor,  with  poor  and  inexperi- 
enced management,  with  strikes,  lack  of  energy,  cases  of 
high  and  unnecessary  expenses,  fraud,  graft,  and  accident, 
the  early  industry  was  not  a  complete  failure? 

§  7.  A  like  difficulty  was  the  lack  of  capital  so  important 
in  this  industry  which  requires  large  investments.  In  some 
cases  trouble  arose  from  inability  to  raise  sufficient  capital 
to  conduct  the  works  on  a  broad  and  expansive  scale.  Such 
failures  as  those  at  Marmora  in  1856  discouraged  English 
capital,  and  that  at  Madoc  in  1846  was  a  check  on  the 
investment  of  American  capital.  The  other  failures  were 
quite  sufficient  to  discourage  domestic  endeavors,  os|)e- 
cially  when  other  industries,  more  adapted  to  the  country 
and  to  the  stage  of  industrial  development,  assured  more 
profit.  Ill-considered  and  excessive  expenditure  of  capital 
at  an  unfavorable  {Ktiut  wrecked  certain  enterprises  at 
Marmora  and  Moisic.  At  other  times  failure  arose  from 
the  impossibility  of  securing  working  capital  at  a  critical 
moment. 


1:: 


§  8.  Reference  has  been  made  already  to  the  fact  that 
the  lack  of  transportation  facilities  kept  up  the  local  mar- 
ket price  and  thus  protected  the  producer,  and  that  on 
other  occasions  the  improvement  of  transimrtation  pre- 
cipitated a  fall  of  prices  in  Canada.  Financial  and  business 
depressions  were  particularly  apt  to  leave  a  swatli  of  fail- 
ures. When  prices  in  England  after  1846  fell  rapidly  to 
almost  half  the  price  obtainable  in  the  early  forties,  the 
furnace  at  Normandale  had  to  be  given  up  and  the  Mar- 
mora furnace  was  temiwrarily  closed.   In  the  fifties,  prices 


«■« 


MICROCOPY   RESOLUTION   TEST   CHART 

(ANSI  and  ISO  TEST  CHART  N.j   2) 


1.0 


I.I 


1.25 


•  50      "l"== 

If  H^ 


2.5 

12.2 

2.0 
1.8 


^  APPLIED  IM/IGE     I 

S^_  '65^    East    Main    Street 

r^S  Rochester.    New    rork  '4609        USA 

'— —  (716)    482  -  0300      Phone 

^S  ('!*>)    288  -  59*i9  -  Fax 


74    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

th  J     i^  *  '^'''^  depression,  prices  r«se  rapidly  in 

1874,  p,g  iron  selling  at  $50  per  ton.  and  a  number  of  ton 
furnaces  and  rolling  mills  were  put  in  operarn  (^'j:"^ 
financial  depression  in  the  seventies.  comWned  with^e  u^ 

went  out  of  busmess  or  became  insolvent.'  ' 

ind^t.  and  .„^.  ,.JX^  ^7™1Z  X" 

ti,^       1  ""»'«^i-.  J^iKe  most  Canadian  manufactnrpr« 

the  early  maker  of  in>n  found  himself  cut  off  f^m  S 
^  tain  by  a  long  haul  and  at  aU  events  by  a  longl^; 

makmgarmorplate.  TheUnited States ma^^ft;^^^^^^^^ 
finished  u-on  was  usually  barred  by  a  high  protective  ta^^^ 
In  the  SIX  years  from  1821  to  1826  tL  RrifT  a        • 
colonies  shipped  to  the  United  SHtl   '  .     ^^^^can 

*  Andrews.  Alport  o«  Cofo„.W  and  Lake  Trade.  1852.  p.  407. 


ELEMENTS  OF  SUCCESS  AND  FAILURE 


75 


$1,492,000.  Thereafter  exports  fell  off  to  an  average  of 
about  $600,000  per  year  for  the  last  half  of  the  decade. 
About  one  quarter  of  the  exports  in  1868  consisted  of  scrap 
iron  and  about  two  thirds  of  pig  iron.'  In  1871  the  exports 
of  iron  and  steel  amounted  to  $766,111  as  compared  with  a 
home  production  of  $10,177,911.  Obviously,  then,  Cana- 
dian producers  had  to  depend  largely  on  the  home  market.^ 
For  a  long  time  the  home  market  was  none  too  encourag- 
ing a  prospect.  When  iron  was  first  smelted  in  the  United 
States  in  1645,  Canada  had  a  population  of  less  than  3,000 
and  in  1763,  twenty-six  years  after  the  first  furnace  had 
begim  operations  in  Canada,  there  were  only  about  60,000 
people  in  the  country.  With  a  population  of  that  size  using 
a  few  iron  kettles  and  stoves,  and  a  few  cannons  and  mor- 
tars for  defensive  purposes,  and  with  the  people  scattered 
over  a  country  where  transportation  was  mainly  by  water 
and  wagons,  the  opportunity  for  an  extensive  iron  industry 
was  small,  indeed.  On  the  other  hand,  a  large  and  growing 
population  in  the  British  colonies  to  the  south,  demanding 
iron  so  insistently  and  in  such  quantities  that  the  restric- 
tions of  the  Home  Government  failed  to  prevent  the  estab- 
lishment of  a  large  number  of  concerns  turning  out  finished 
products,  gave  the  New  England  ironmaker  a  market  be- 
yond all  comparison  with  that  of  his  Canadian  contempK>- 
raries.  When  George  Washington  became  President,  iron 
was  being  made  in  almost  every  State  in  the  United 
States;  there  was  but  one  small  furnace  in  Canada.'  At 
the  beginning  of  the  nineteenth  century  the  population  of 
what  is  now  Canada  was  considerably  below  the  half-mil- 
lion mark;  some  twenty-five  years  later  it  had  increased  to 
900,000;  and  in  1851  it  was  over  2,300,000;  in  1871  it  was 
over  3,500,000,  and  in  1881  over  4,300,000.*   These  statis- 


»  United  States,  Commercial  Relationg  of  the  United  States,  1868. 
'  See  Appendix  C,  Table  I,  and  Appendix  G,  Table  I. 
'  E.  Channing,  The  United  StaUi  ojf  America,  vol.  i,  p.  1. 
*  See  Appendix  A. 


mmm 


'  I 


76    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

tics  indicate  in  a  general  way  the  size  of  the  market  at 
various  times  for  such  manufactures  as  stoves,  kettles,  pots, 
and  other  iron  goods  in  general  use.  Contrast  with  this  the 
situation  in  the  United  States.  In  1790  there  were  nearly 
4,000,000  in  the  country,  nearly  eight  times  as  many  as  in 
Canada.  In  1850  there  were  25,000,000  people,  ten  times 
as  many  as  in  Canada,  and  in  1881  there  were  38,000,000, 
or  nine  times  the  population  of  Canada.  A  better  imder- 
standing  of  the  size  of  the  market  may  be  obtained  by  con- 
sidering the  number  of  plants  producing  various  finishing 
products.  Until  ia50  the  general  extent  of  Canadian  manu- 
facturing was  not  great.  More  than  twice  as  many  people 
were  employed  in  agricultural  as  in  industrial  occupations.' 
Sawmills  and  gristmills  con-tituted  the  chief  industrial 
enterprises  of  the  country,  and  until  these  began  to  use 
steam  instead  of  water  power,  and  until  other  kinds  of  in- 
dustries began  to  spring  up,  the  demand  for  iron  goods  for 
industrial  purposes  was  small. 

Even  before  1851,  however,  the  production  of  the  more 
highly  finished  iron  products  had  begun  in  Canada.  Most 
countries  have  produced  finished  iron  products  even  earlier 
than  such  intermediate  products  as  pig  iron  and  bar  iron, 
and,  as  we  have  already  seen,  many  of  the  earlier  forges  in 
Canada  were  producing  the  actual  finished  articles.  Be- 
sides these,  plants  w^re  established  to  produce  finished 
articles  from  scrap  iron,  pig  iron,  or  bar  iron.  The  produc- 
tion of  pig  iron,  of  course,  presumed  that  such  a  market 
existed. 

Satisfactory  statistics  regarding  various  kinds  of  prod- 
ucts are  not  available.  No  general  figures  are  at  hand  un- 
less the  items,  "machine  shop  and  foundry  products"  and 
"iron  and  steel  products"  may  be  regarded  as  satisfactorily 
inclusive.  While  these  items  by  no  means  represent  all  the 
endeavors  to  manufacture  iron  and  steel  products,  they 
may  be  accepted  as  of  some  significance  in  indicating,  in  a 
»  Census  oj  Canada,  1871,  vol.  iv,  p.  193. 


ELEMENTS  OF  SUCCESS  AND  FiULURE        77 

general  way,  the  extent  of  the  Canadian  output  of  finished 
products  and  the  demand  for  raw  materials. 

In  1871  the  two  items,  "machine  shop  and  foundrj'  pro- 
ducts" and  "iron  and  steel  products,"  in  the  Census, 
amounted  to  over  $10,000,000.  By  1881  the  total  output 
of  iron  and  steel  products  amounted  to  $16,000,000.  An 
important  single  factor  in  expanding  the  demand  for  iron 
was  the  growth  of  railway  mileage  from  159  miles  m  1851 
to  7331  miles  in  1881.  The  Nova  Scotia  Steel  and  Forge 
Company  was  largely  the  product  of  the  opportunity  to 
supply  railway  iron  in  the  early  seventies  for  the  Inter- 
colonial Railway. 

On  the  other  hand,  a  surprisingly  large  part  of  the  de- 
mand for  iron,  finished  and  unwrought,  was  met  by  impor- 
tation.   In  1844  iron  to  the  value  of  over  $1,500,000  was 
imported,  largely  from  the  United  Kingdom.^  In  1850  this 
item  amounted  to  $1,500,000;  in  1854,  to  about  $6,000,000; 
in  1858,  to  about  $2,500,000;  and  in  1862,  $1,500,000 
worth  was  imoorted.    In  the  sixties  the  annual  impels 
averaged  about  $5,000,000.2    !„  the  early  seventies  the 
building  of  the  Intercolonial  Railway  brought  the  annual 
average  up  to  $20,000,000.  But  depression  followed  in  the 
second  half  of  the  decade,  and  imports  of  iron  and  steel  fell 
to  an  average  of  about  $10,000,000  per  year.  Thus  in  1881 
about  one  half  of  the  consumption  of  iron  and  steel  pro- 
ducts was  manufactured  within  the  country.    A  modem 
mill  could  have  produced  the  total  imports  of  aU  kinds,  but 
it  would  scarcely  have  represented  an  extensive  iron  and 
steel  industry. 

§  10.  It  has  been  quite  evident  that  the  tariff  duties  that 
existed  prior  to  1879  did  not  establish  in  Canada  a  great 
iron  and  steel  industry.  It  also  appears  that  conditions 
existed  which  would  themselves  have  prevented  the  exten- 

»  United  States.  Report  of  the  Secretary  of  the  Treatury,  op.  cii.,  p.  148. 
»  See  Appendix  A. 


'm 


11 


78    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

sion  of  the  industry  except  under  the  stimulus  of  an  extra- 
ordinarily high  scale  of  duties.  The  narrowness  of  the 
market  prevented  the  development  of  plants  that  could 
compete  with  the  English  firms  producing  on  a  large  scale. 
If  the  Canadian  producers  could  scarcely  meet  British  and 
American  prices,  even  with  the  advantage  of  proximity  to 
the  market,  they  could  hardly  be  expecte  '  to  meet  the 
same  producers  in  foreign  markets.  The  most,  therefore, 
that  a  rather  high  customs  tariff  could  possibly  have  done 
would  have  been  to  develop  a  small  Canadian  iron  and  steel 
trade  to  supply  the  limited  home  market. 

Would  high  protection  have  been  a  wise  policy  under 
such  circumstances?  The  answer  to  ;  .is  question  involves 
a  fundamental  principle  that  is  as  true  to-day  as  it  was 
fifty  or  thirty  years  ago.  Although  conditions  of  to-day 
may  warrant  high  protection,  the  principle  should  be  kept 
in  mind. 

New  countries  always  make  lar  ^.  per  capita  investments 
in  the  form  of  imported  goods.  Iron  and  steel  products, 
used  in  so  many  industries  both  extractive  and  manufac- 
turing, form  a  large  part  of  this  investment.  Almost  every 
new  enterprise  demands  a  high  consumption  of  iron  in  its 
original  investment  and  in  its  operation.  Furthermore,  it  is 
desirable  that  such  capital  goods  should  be  obtainable  at 
as  low  a  cost  as  possible,  that  they  may  not  form  a  future 
burden  on  the  industry  of  a  country  until  replaced  by  less 
costly  materials  at  a  later  date.  The  wisdom  of  a  low-tariff 
poli-y  under  such  conditions  may  then  pass  unchallenged, 
especially  when  unfavorable  conditions,  as  we  have  already 
noted,  would  have  set  the  cost  of  an  adequate  home  pro- 
duction exceedingly  high.  The  natural  costs  of  transporta- 
tion were  protection  enough,  and  the  incidental  protection 
granted  by  the  revenue  tariff  was  a  gratuity  that  would 
probably  have  been  avoided  but  for  financial  reasons. 
That  the  iron  interests  were  not  large  enough  or  strong 
enough  to  influence  the  political  situation  is  additional 


ELEMENTS  OF  SUCCESS  AND  FAILURE        79 

evidence  that  a  high  protective  system  would  have  been 
ill-advised  during  this  early  period  of  Canada's  industrial 
development.  Whether  elements  were  introduced  to  render 
this  general  conclusion  invalid  for  more  recent  years  is  the 
main  problem  of  the  remainder  of  our  study. 


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PART  THREE 

THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

1879-1897 


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CHAPTER  V 

THB  TARIFF  AND  BOUNT>    SYSTEM 

§  1.  In  most  respects  the  year  1867  marks  the  beginning 
of  the  third  period  of  Canadian  economic  history.   The 
seventies,  as  well  as  the  early  eighties,  and  the  period  from 
1893  to  1897  were  years  of  general  industrial  depression: 
an  era  of  trial.  Hope  and  energy  were  often  defeated  by 
difficulty  and  discouragement.   The  adoption  of  the  na- 
tional poUcy  of  protection  in  1879,  however,  gives  some 
reason  for  distinguishing  the  years  1879  to  1897  from  the 
eariier  part  of  the  period.   For  our  purpose,  at  least,  ia 
tracing  the  history  of  the  Canadian  iron  and  f  eel  industry 
in  its  relation  to  the  tariff,  we  shnU  follow  such  a  division. 
The  protective  spirit  had  appeared  in  Canada  before 
1879.    In  the  fifties,  Isaac  Buchanan  had  organized  a 
movement  in  favor  of  high  protection.  The  tariff  acts  of 
the  early  sixties  admittedly  granted  some  incidental  pro- 
tection, and,  in  1871,  a  high  protective  tariff  had  been 
framed  and  put  into  force,  only  to  be  withdrawn  in  1872. 
But  the  depression  of  the  seventies  resulted  m  a  deficit  for 
the  Dominion  Treasury,   at  a  time  when  governmental 
expenditures  for  raihroads  were  very  great.  Consequently, 
the  Conservatives,  who  had  attempted  to  introduce  pro- 
tection in  1871,  seized  on  the  opportunity  to  regain  power 
by  advocating  a  national  policy  of  protection  in  1878.  The 
scheme  was  a  success  beyond  expectations.  A  combination 
of  patriotic  feeling,  half-tacit  belief  in  the  protective  policy, 
and  the  natural  tendency  to  attribute  depression  to  the 
Government  in  power,  resulted  in  an  election  which  re- 
lieved the  Liberal  Party  of  the  duties  of  admmistration. 
By  1880  the  protective  policy  was  an  accepted  principle  in 


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Hi. 


84    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

the  minds  of  the  gi«ater  number  of  Canadian  people.  >  The 
application  of  this  principle  to  the  iron  and  steel  industry 
is  the  subject  to  be  discussed  iu  this  chapter. 

§  2.  Evidence  has  already  been  presented  to  establish 
the  fact  that  there  was  ample  room  for  the  development  of 
an  iron  industry.  In  1879  there  was  only  one  iron  plant  of 
importance  in  the  Dominion,  and  the  rolling-mill  industry 
was  far  from  supplying  the  needs  of  the  country.  The 
opportunity  to  develop  an  industry  was  accepted  by  the 
Conservatives  in  1879  when  they  introduced  the  national 
policy  of  protection  and  increased  the  duties  on  iron. 
Altogether,  thirty-one  items  were  mentioned  in  the  iron 
schedule.*  Pig  iron  was  admitted  at  $2  per  ton;  scrap  iron, 
at  12§  per  cent  ad  valorem,*  slabs,  blooms  and  billets,  muck 
and  puddled  bars,  at  12§  per  cent;  and  rolled  and  ham- 
mered bars,  at  17j  per  cent.  The  duties  on  other  articles 
varied  from  10  to  35  per  cent  as  follows:  Locomotive  steel 
tires,  10  per  cent;  hoops,  12i  per  cent;  iron  and  steel  wire, 
15  per  cent;  railway  fishplates  and  frogs,  17  per  cent;  stoves, 
castings,  and  car  wheels,  2A  per  cent;  bolts,  nuts,  and  nails, 
30  per  cent;  screws,  35  per  cent. 

Mr.  McLean,  in  his  "  TariflF  History  of  Canada,"  esti- 
mates the  average  rate  of  duty  from  1879  to  1887  at  20.78 
per  cent.*  If  the  duty  of  $2  per  ton  on  pig  iron  were  in- 
tended to  be  protective,  allowance  should  be  'iiade  for 
other  provisions.  For  instance,  as  a  favor  to  New  Bruns- 
wick shipbuilders,  a  full  drawback  of  duties  paid  was  given 
on  iron  imported  and  used  in  composite  ships.'  The  duties 
on  bituminous  and  anthracite  coal  and  on  coke  were  in- 

'  It  has  been  said  the  Liberals  would  have  adopted  the  protective 
policy  had  the  Conservatives  not  done  so.  The  Liberal  Party  has  been 
accused  of  stealing  the  protective  policy  in  1897. 

'  42  Vic,  1879,  chap.  15;  see  Appendix  F. 

*  Equal  to  abcjt  $2  per  ton. 

*  J.  A.  McLean,  The  Tariff  History  of  Canada,  p.  88. 

*  JJouse  of  Commons  Debates,  1879,  p.  1449. 


THE  TARIFF  AND    iOUNTY  SYSTEM  85 

creased  to  50  cents  per  ton  as  a  favor  to  Nova  Scotia  mines. 
The  duty  of  $«  per  ton  on  pig  iron  was  little  mor    than 
compensation  for  the  mcreased  duty  on  fuel.  The  greatest  ^ 
increase  in  protection  wa«  given  to  the  industries  producing  i 
the  more  finished  products.  The  producers  of  raw  materials 
secured  protection  amounting  to  about  10  or  20  per  cent. 
From  1879  to  1887  there  was  no  general  tariff  revision. 
Now  and  then  some  chanje  in  an  item  was  made,  to  meet 
fiscal  needs  or  to  suit  prolec+ive  policy  or  politicu.  neces- 
sity. In  1880  the  duties  on  labs,  blooms,  and  billets  were 
reduced  from  12i  to  10  per  cent.     It  was  provided  that 
steel  ingots  should  be  admitted  free  for  another  year,  or 
until  they  were  manufactured  in  Canada,  at  which  time  a 
duty  of  $5  per  ton  was  to  be  impo.J-M.»  In  1881  the  rate  on 
rolled  beams,  channels,  and  angles  was  reduced  from  15  to 
12i  per  cent,  and  the  rate  on  wrought-iron  tubing  was 
increased  from  15  to  25  per  cent.*  In  1882  iron  and  steel, 
old  scrap,  galvanized  iron  and  steel  wire  15  gauge  and 
under,  steel  raUs,  bars,  and  fishplates  were  added  to  the 
free  list.»   Drawbacks  were  given  on  articles  used  in  the 
construction  of  the  Canadian  Pacific  RaUway.*  As  a  sub- 
stitute for  the  duty,  to  offset  the  reductions  on  scrap  aon, 
and  to  avoid  a  readjustment  of  the  whole  schedule,  the 
Government  decided,  in  188S,  to  inaugurate  a  bounty 
system.  The  bounty  on  pig  iron  was  fixed  for  two  pen  >d8 
of  three  years  each  at  $1.50  per  ton  for  tiie  first  period,  avid 
$1.00  for  the  second.'  Provision  was  made  '-.r  regule    u;? 
quantity  and  for  such  other  details  as  m^J  '-.  be  four  4 
expedient,  to  prevent  fraud  and  insure  the  good  effect  of 

In  1884,'  m  order  to  give  more  protection  to  the  steel 

»  4S  Vic,  1880.  chap.  18. 

»  Budget  Speech,  1881.  February  18,  pp.  48-«. 

•  4«  Vic,  1884,  chap.  6. 

•  45  Vic.  1884.  chap.  7.  '  43  Vic.  1880,  chap.  14. 

•  Journal  of  the  Iron  and  Steel  Imttiute,  1883.  no.  Xii,  p.  796. 
'  47  Vic,  1884,  chap.  SO. 


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86    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

industry,  the  duty  on  steel  was  changed  from  $5  to  $3  per 
ton,  plus  5  ptr  cent.  The  rate  on  steel  rolled  wire  rods  for 
manufacturing  wire  was  reduced  from  15  to  5  per  cent; 
steel  and  iron  angles,  beams,  plates,  and  knees  for  ships 
were  placed  on  the  free  list.  In  1885  there  were  additions 
to  the  free  list  as  follows:  i  Coke  used  in  Canadian  manu- 
facturing, steel  for  use  in  the  manufacture  of  skates,  hoop 
iron  for  the  manufacture  of  tubular  rivets,  and  steel  in 
sheets  for  manufacture  of  spades  and  shovels.  In  1886  * 
there  was  an  increase  of  duties  on  several  finished  products. 
Bolts,  nuts,  and  rivets  were  charged  1  cent  per  pound  plus 
15  per  cent.   The  duty  on  wrought-iron  tubmg  was  in- 
creased from  25  to  35  per  cent.  Galvanized  iron  and  steel 
were  taken  from  the  free  .ist  and  taxed  20  per  cent.  Scrap 
iron  and  steel,  when  not  fit  for  actual  use,  were  admitted 
free.  At  the  same  time  the  payment  oi  a  bounty  of  81.50 
per  ton  on  pig  iron  was  extended  till  1890,  and  a  bounty  of 
$1.00  per  ton  thereafter  was  provided  for  till  1892.' 

§  3.  The  crisis  in  the  movement  to  give  higher  protec- 
tion to  the  iron  industry  came  in  1887.  It  is  said  that  Nova 
Scotia  began  to  talk  of  secession  unless  her  industries  were 
as  favorably  treated  as  were  those  of  other  Provinces.  Con- 
sequently much  higher  protective  duties  were  mtroduced 
in  favor  of  the  u-on  and  steel  industry.  Three  general  prm- 
ciples  were  followed.  In  the  first  place,  the  American  tariff, 
which  was  supposed  to  be  a  carefully  worked-out  schedule, 
was  taken  as  the  basis  of  the  Canadian  duties,  two  thirds 
of  the  American  duties  in  general  being  imposed.  Pig  iron 
was  granted  the  protection  of  a  duty  of  $4  per  ton;  scrap 
iron  was  taxed  $2  per  ton;  bar  and  rolled  iron  were  made 
dutiable  at  $13  and  railway  fishplates  at  $12  per  ton.  An- 
other prmciple  was  that  of  not  pressing  too  heavily  on  the 
railroad  industry.  The  third  was  the  substitution  of  specific 

•  Budget  Speech.  1885.  March  8,  p.  59. 

«  49  Vic.  1886.  chap.  18.  i  49  Vic.  1886.  chap.  88. 


THE  TARIFF  AND  BOUNTY  SYSTEM 


87 


^ill 


and  compound  for  ad  valorem  duties.  Shapes  for  bridge- 
buildmg  were  made  dutiable  at  one  half  cent  per  pound 
plus  10  per  cent;  nuts,  washers,  and  bolts  at  one  cent  per 
pound  plus  25  per  cent.  A  35  per  cent  minimum  ad  valorem 
duty  was  frequently  added;  as  in  the  case  of  iron  and  steel 
forgings,  which  were  charged  1^  cents  per  pound,  with  a 
minimum  of  35  per  cent.  The  duty  on  steel  ingots  was 
increased  from  $3  plus  10  per  cent  to  30  per  cent,  with  a 
$12  minimum.  Wire  for  steel  spring,  formerly  on  the  free 
list,  was  charged  20  per  cent  because  it  was  now  being  made 
in  Canada.  Iron  and  steel  wire  for  fencmg  of  a  kind  not 
made  in  the  country  was  placed  on  the  free  list.* 

Thus  there  was  a  general  increase  in  protection,  few 
imports  escapmg  increased  duties.  The  primary  industry 
received  an  increase  of  protection  amoimting  to  $2  per  ton, 
and  producers  of  finbhed  products  were  favored  by  much 
more  than  a  compensatory  duty.  While  the  duty  on  bi- 
tuminous coal  was  maintained  in  favor  of  Nova  Scotia, 
anthracite  was  placed  on  the  free  list  m  the  hope  of  devel- 
oping and  extendmg  the  Ontario  iron  industry  .>*  As  rail- 
way development  was  of  enormous  importance  to  the 
country,  steel  rails  were  left  on  the  free  list.'  Since  railway 
fishplates  were  being  manufactured  in  the  country  from 
imported  material  on  which  increased  duties  were  paid,* 
the  producers  were  given  the  protection  of  a  duty  of  $12 
per  ton. 

The  year  1890  saw  an  alteration  here  and  there;  the  duty 
on  picks  and  mattocks  was  raised  from  35  per  cent  to  1  cent 
per  pound  plus  25  per  cent.  The  ad  valorem  duty  on  spades 
and  shovels  was  increased  by  5  per  cent.  Duties  on 
wrought  iron  and  steel  nuts,  washers,  rivets,  bolts,  and 
hinges  were  increased  by  3  pei  cent.  Wrought  scrap  iron 
and  scrap  steel  were  charged  $2  per  ton.  Ferro-manganese, 
silicon,  spiegeleisen,  steel  bloom  ends,  and  crop  ends  of 


m 


i«  '- 


»  Debatet.  1887,  p.  501. 
»   Ilrid.,  p.  1043. 


»  Ibid.,  p.  40«. 

*  Debates.  1888,  p.  602. 


^ 


88    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

steel  rails  imported  for  the  manufacture  of  iron  and  steel, 
were  charged  $2.  At  the  same  time  the  bounty  on  pig  iron 
was  increased  from  $1  to  $2  per  ton,  and  extended  to  cover 
the  years  from  1892  to  1897. 

§  4.  In  1893  there  was  a  wide  demand  for  reduction  of 
the  Canadian  customs  duties,  especially  the  duties  in  the 
iron  schedule,  and  a  general  revision  resulted.  The  duty 
on  bar  bon  was  reduced  from  $13  to  $10;  on  puddled  bars, 
from  $9  to  $5;  on  iron  and  steel  screws,  from  85  to  30  per 
cent;  on  implements,  from  35  per  cent  to  20  per  cent;  on 
barbed  wire,  from  li  cents  to  three  fourths  cent  per  pound. 
Pig  iron,  however,  remained  dutiable  at  $4  per  ton,  and 
the  duty  on  wrought  scrap  iron  was  increased  to  $3  for 
1895,  and  $4  thereafter.  Producers  of  spiegeleisen  suffered 
a  reduction  of  protection  from  10  to  5  per  cent.  Slabs, 
blooms,  and  billets  were  charged  $5  per  ton.  In  order  to 
include  material  brought  from  Great  Britain  as  ballast, 
cuttings,  clippings,  and  punchings  were  charged  $4  per  ton. 
Public  opinion  demanded  a  reduction,  especially  on  the 
finished  products,  like  agricultural  implements.  The  revi- 
sion tended,  therefore,  to  cheapen  the  finished  products  by 
reducing  the  duties,  but  the  rates  on  raw  materials,  pig 
iron  and  scrap  iron,  were  maintained  or  raised. 

The  bounty  of  $3  per  ton  on  pig  iron  was  continued  for 
five  years  for  furnaces  then  m  operation,  and  was  to  be 
paid  for  five  years  after  the  beginning  of  operations  to 
furnaces  built  thereafter.  Thus,  while  the  rate  of  bounty 
was  not  increased,  its  operation  was  extended  and  made 
more  effective.  Furthermore,  as  compensation  for  the 
reduction  in  the  customs  duties,  the  law  provided  for  a 
bounty  of  $2  per  ton  on  puddled  bars  and  steel  billets  made 
in  Canada  from  Canadian  pig  made  from  Canadian  ore. 
The  manufacturers  had  to  submit  satisfactory  evidence 
that  the  claims  were  correct.  ^  Later,  m  1896,"  the  pig-iron 

»  57-58  Vic,  1893,  chap.  9.         »  60-61  Vic,  1896,  chap-  6. 


'1* 


if '^ 


THE  TARIFF  AND  BOUNTY  SYSTEM  89 

bounty  system  was  extended  by  making  it  applicable  to 
aU  iron  made  in  Canada,  in  proportion  to  tbe  percentage 
of  domestic  ore  used.  The  manufacturers  claimed  that 
Canadian  ore  was  too  uniform  in  quality  to  permit  the 
production  of  all  the  grades  of  iron  requured.  Moreover, 
the  furnace  which  the  Nova  Scotia  Steel  Company  had 
built  at  Ferrona,  Nova  Scotia,  was  using  Newfoundland 
ore,  and  the  HamUton  Blast  Furnace  Company  was  im- 
porting considerable  quantities  of  ore  from  the  Lake 
Superior  district.^  Although  the  law  affected  only  the 
proportion  made  from  Canadian  ore,  it  paved  the  way  for 
larger  claims,  and  a  further  extension  by  the  Liberals,  in 
1897. 

§  5.  Meanwhile,  the  Provinces  and  municipalities  were 
also  giving  aid  to  the  iron  and  steel  industry.  As  a  result 
of  a  deputation  to  Sir  Oliver  Mowat,  Prime  Minister  of 
Ontario,  uridng  that  a  provincial  bonus  of  $2  per  ton  be 
granted  on  pig  iron  made  from  Ontario  ore,  Ontario  insti- 
tuted a  bounty  system.  A  mming  fund  of  $125,000,  out  of 
which  a  bounty  of  $1  for  each  short  ton  of  pig  metal  might 
be  paid  for  five  years  after  July  1,  1894,  was  set  aside  for 
producers  of  iron  ore.  Not  more  than  $25,000  was  to  be 
paid  each  year,  and,  if  the  ore  mined  and  smelted  exceeded 
the  equivalent  of  25,000  tons  of  pig  iron,  the  bounty  per 
ton  was  to  be  proportionately  reduced."   In  spite  of  the 
fact  that  the  bounty  was  payable  to  the  miners  of  iron  ore, 
the  furnace-men  were  able  to  secure  nearly  all  the  benefit, 
since  the  competition  of  the  miners  usually  reduced  the 
price  of  the  ore  by  the  extent  of  the  bounty.' 

In  1895  Quebec  passed  "An  Act  Respecting  the  Coloni- 
zation  of  Certain  Parts  of  the  Province  and  for  promotmg, 
the  Mining  Industry  Therein."  The  Canada  Iron  Furnace 

»  Iron  Age,  vol.  lviii,  p.  58. 

»  Ontario,  Report  of  Bureau  of  Mines,  1908,  p.  196. 

«  Monetary  Times,  vol.  Lxxx,  p.  610. 


^\ 


l  ;i 


90    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

^  Company  was  virtually  made  a  colonization  society,  and 
30,000  acres  of  woodland  were  set  aside  or  reserved  for 
purposes  of  colonization  by  the  employees  of  the  com- 
pany. The  industry  was  thus  protected  from  woodland 
speculators  and  was  assured  of  a  constant  supply  of 
fuel.  I 

Municipalities  also  offered  special  inducements  to  this 
industrj'  in  the  form  of  exemptions  from  taxation,  bonuses, 
and  free  sites;  and  railroads  offered  attractive  freight  rates. 
Pictou,  Nova  Scotia,  gave  the  Pictou  Charcoal  Iron  Com- 
pany a  subsidy  of  $20,000  and  a  twenty-year  exemption 
from  taxation.  Hamilton  was  even  more  generous  in  grant- 
ing the  Hamilton  Blast  Furnace  Company  a  site  of  seventy- 
five  acres  of  land  at  a  cost  of  $35,000,  a  bonus  of  $40,000  in 
city  debentures,  and  a  bonu  $60,000,  if  steel-works  were 
built.2 


§  6.  Such  is  a  general  outline  of  the  government  aid  given 
to  the  iron  and  steel  industry  under  the  first  period  of  the 
application  of  the  national  o  rotective  policy.  It  remains 
now  to  consider  the  merits  of  the  policy  adopted  as  well  as 
those  features  which  tended  to  make  it  useless  or  even 
opposed  to  the  interests  of  Canadian  industrial  develop- 
ment. 

When  the  national  policy  was  first  inlroduced,  and  when 
it  was  extended  from  time  to  time,  the  usual  arguments 
were  urged  in  its  favor.  The  Government  exi)ected  a  great 
development  of  the  iron  and  steel  industry.  For  instance, 
Sir  Leonard  Tilley  in  1879  prophesied  the  introduction  of  a 
new  process  by  which  the  phosphorus  and  sulphur  in  iron 
ore  could  be  removed  by  the  application  of  heat  from  pe- 
troleum. He  expected  that  the  iron  industry  would  spring 
up  all  over  the  country  and  with  most  l>eneficial  results.' 

'  Canadian  Engineer,  vol.  iii,  p.  290. 

•  Canadian  Mining  Review,  vol.  iii,  p.  21. 

»  Budget  Rpeerh,  1870,  p.  l.S. 


THE  TARIFF  AND  BOUNTY  SYSTEM  91 

Sir  Charles  Tupper  was  even  more  hopeful,  in  1587,  when 
he  said  that  iron  plants  in  the  Northwest  Territories  and 
in  British  Columbia  would  swell  the  Canadian  output,  i 

Probably  the  most  important  and  legitimate  iv..Lifica- 
tion  of  this  policy  in  this  early  peilod  lay  in  the  hope  of 
developing  Canada's  enormous  natural  resources;  a  stock 
argument  accepted  by  miners,  manufacturers,  laborers, 
farmers,  and  the  consuming  public  alike.  The  Government, 
in  "taking  into  consideration  the  enormous  iron  interests 
of  the  country,"  was  considering  the  large  deposits  of  ore 
adjacent  to  inexhaustible  coal-bedi  in  Nova  Scotia.    In 
every  Province  of  Canada,  as  we  have  seen,  there  were  ^ 
large  deposits  of  iron  ore.  Quite  as  important  as  the  bene- 
fit to  the  miners  of  iron  ore  was  the  stimulus  expected  for  i 
the  coal  industry.  Statistics  were  quoted  to  show  that  in-  ' 
creased  production  of  iron  always  brings  a  large  increase 
in  the  coal  output.  The  coal  industiy  would  be  ^axed  to 
its  full  capacity  to  furnish  the  additional  output  requirea. 
Consequently,  in  1887,  when  the  Government  hope*!  to 
encourage  the  iron  industry  of  Ontario  and  to  check  the 
exportation  of  Ontario's  ores  to  the  United  States,^  it  felt 
free  to  aboUsh  the  duty  on  anthracite  coal. 

The  Government  hoped,  too,  that  protection  to  the  iron 
and  steel  industry  would  entirely  sweep  away  Canada's  so- 
called  "unfavorable  balance  of  trade."  In  1887  Mr.  Tup- 
per quoted  statistics  to  show  that  Canada's  excess  of  im- 
ports was  practically  equal  to  her  imports  of  iron  and  steel 
products.'  Why  should  not  the  Canadian  indu.-  ry  supply 
the  whole  demand  and  sweep  away  the  unfavorable  bal- 
ance? This  argument  was  particularly  appropriate  m  view 
of  the  fact  that  American  ironmakers  were  selling  in  Can- 
ada at  slaughter  prices.  In  1879  circulars  had  stated  that 
Americans  would  sell  iron  at  a  price  10  per  cent  below  the 

«  Bvdget  Speech.  1887.  March  ?0,  pp.  49-51. 
«  Ibid.,  pp.  45-51. 
•  Ibid.,  pp  49-51. 


1f 


i,  K',a^ltO^H  iv  ■.iETi^'v&ri 


92    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

price  at  the  furnace  at  Londonderry,  Nova  Scotia.'  In 
1889  the  nail  trade  of  the  United  States  was  reported  to  be 
in  such  a  flourishing  state  that  a  reduction  of  Canadian 
protection  would  have  ruined  the  Canadian  mills.  We 
find,  however,  that  in  1893  to  1895  Canadian  plants  were 
able  to  continue  production,  despite  the  fall  in  prices  and 
unwonted  stress  of  competition  with  iron-men  of  the 
United  States.  Unquestionably  Canadian  mills  benefited 
to  the  extent  of  learning  a  few  secrets  of  economy  to  stand 
them  in  good  stead  thereafter,  yet  the  dumping  of  Ameri- 
can products  natiu-ally  gave  rise  to  a  demand  for  an  in- 
crease of  protection.^ 

Protection  was  to  be  a  boon  to  another  general  interest 
—  the  laboring  class.  As  we  have  seen,  the  tariff  of  1887, 
based  on  the  American  iron  and  steel  schedule,  gave  pro- 
tection in  proportion  to  the  amount  of  labor  involved  in 
production,  least  on  raw  materials,  more  on  intermediate 
products,  and  most  on  finished  articles. 

The  development  of  the  iron  and  steel  industry  would 
undoubtedly  mean  employment  for  more  labor  in  mining, 
transportation,  machinery,  coal  mining,  quarrying,  and 
building  industries.^  The  development  of  a  charcoal  iron 
industry  would  increase  the  demand  for  charcoal,  and  thus 
would  prove  of  value  to  the  agricultural  communities  from 
which  the  charcoal  might  be  secured.  Fxuthermore,  as 
the  producer  of  pig  iron  could  not  fall  back  on  other  pro- 
ducers to  ret-oup  himself  for  losses  sustained  in  times  of 
depression,  he  could  or  !y  cut  down  wages  of  the  men  em- 
ployed. As  the  manufacture  of  pig  iron  involved  the  em- 
ployment of  much  labor,  such  a  course  was  not  desirable; 
consequently  protection  should  be  granted  the  industry  in 
proportion  to  the  amount  of  labor  used.* 

>  Iron  Age,  vol.  i.vi,  p.  992. 

•  Bu'letin  of  the  Iron  and  Steel  Associatum,  1886,  vol.  xx,  p.  1. 

•  Ontario,  Report  of  Royal  Commission  on  Mines,  p.  tie. 

•  Car\<sdinn  Mining  Review,  vol.  x\-,  p.  172. 


THE  TARIFF  AND  BOUNTY  SYSTEM  D3 

As  if  the  protective  principle  were  none  too  soimd  fun- 
damentally, a  few  other  arguments  were  tacked  on.  The 
tariff  of  1887  was  said  to  be  partly  a  revenue  measure.^  In 
1893  it  was  agreed  that  protection  was  necessary  to  offset 
the  freight  on  Nova  Scotia's  ship .  lent?  of  iron  to  Ontario. 
As  Nova  Scotia  ordinarily  paid  $4.50  a  ton  for  shipping  iron 
to  Ontario,  by  either  rail  or  water,  iron  shipped  from  Buf- 
falo to  Ontario  was  scarcely  at  a  disadvantage  after  paying 
t;  0  duty.  Inland  freight  on  British  iron  was  also  much  less 
than  en  domestic  iron,  so  that  the  duty  was  at  least  half 
neutralized  by  greater  costs  of  transportation.' 

The  Government  pointed  out,  too,  that  to  start  an  iron 
industry  on  an  important  scale  in  any  country,  however 
favorable  the  natural  conditions,  state  aid  by  bounty  or 
tariff  protection,  or  both,  had  been  found  necessary,  and  , 
that  those  countries  which  had  protected  the  industry  were 
then  the  large  producers  of  iron.'   The  iron  industry  of 
Great  Britain  was  supposed  to  have  been  developed  by 
high  protective  duties;  the  influence  of  technical  'nventions 
and  free  raw  materiab  was  entirely  overiooked.*    The 
American  iron  industry  was  taken  as  a  further  illustration 
of  the  benefits  of  protection;  it  was  convenient  to  omit  the 
fact  that  the  early  iron  trade  of  the  United  States  was  de- 
veloped along  the  eastern  seaboard  under  extraordinary 
conditions,  and  that  a  high  tariff  did  not  save  it  so  far  as 
those  localities  were  concerned.*   The  need  for  some  en- 
couragement was  fully  explained  on  the  ground  that  all 
iron  industries  are  handicapped  at  first  by  very  heavy 
initial  expenditure  m  prospecting,  construction  of  plant, 
securing  and  developing  mines,  woodlands,  quarries,  and 
shipping  docks.    The  Government,  therefore,  thought  it 
imperative  that  it  should  give  stability  to  the  tariff  and  so 
invite  the  confidence  of  capitalists."  While,  theoretically, 

»  Debates,  1887,  p.  1808.  »  Iron  Age.  vol.  U,  p.  1«91. 

»  Canadian  Engineer,  vol.  I.  p.  846.       *  Debates,  1903.  p.  4264. 

»  Ibid.,  p.  4289.  *  Canadian  F.ngineer,  vol.  m,  p.  «89. 


ill 


■Hi 


It 


tWM 


m 


I'r 


94    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

such  was  the  policy,  in  practice  the  reverse  obtained.  For 
instance,  in  189-4,  Mr.  Foster  gave  an  increase  of  protection 
to  iron  and  steel  wire  manufacturers  who  had  finished  all 
experimenting  and  had  begun  to  manufacture  extensively.* 
In  other  words,  the  practice  seemed  to  be  to  grant  protec- 
tion, not  to  infant  industries,  but  to  industries  that  had 
already  assumed  coasiderable  importance. 


;i;    i 


I!  if 
If'' 


§  7.  Meanwhile  the  duties,  especially  those  of  1887, 
were  under  much  discussion.  This  discussion  ended  during 
the  years  1893  to  1896,  in  a  general  demand  for  reduction.* 
Of  course,  some  asked  for  much  higher  protection  for  the 
primary  products  and  prohibitive  duties  on  substitutes. 
On  the  other  hand,  manufacturers  for  whom  these  goods 
were  raw  materials  were  anxious  to  secure  them  as  cheaply 
as  possible.  Consumers,  too,  were  anxious  to  seciire  the 
finished  products  at  low  prices,  but  the  manufacturers  of 

ich  products  wanted  adequate  protection. 

It  is  natural,  then,  that  the  first  discussion  centered 
around  the  effect  of  the  duties  of  1879.  Since  there  was 
only  one  producing  plant  in  the  country  at  this  time,  — 
that  at  Londonderry,  —  it  was  claimed  that  the  duty  was 
protecting  a  monopoly  and  that  the  Londonderry  company 
kept  the  price  15  to  30  cents  per  hundredweight,  or  $2  per 
ton,  higher  than  Liverpool  orices.  It  took  advantage  not 
only  of  the  duty,  but  even  of  the  insurance  against  rust 
during  transportation  of  iron  from  Europe.  Prices  for  pig 
iron  advanced  as  EngUsh  prices  advanced.'   Although  the 

»  DehaUi,  1894,  p.  2513.  »  Canadian  Engineer,  vol.  i,  p.  246. 

•  Prices  of  pig  iron  1878-81  (per  100  Iba.) 

1878  1879  1880  1881 

English  iron  at  Montreal,  duty  not  paid 1.63     i.89      1.70 

Londonderry  iron 1.80     2.15      2.00 

Londonderry  iron  at  St.  John.  N.B 1.90    2.10     2.46      2.20 

Price*  of  nail  sheet  at  Montreal  1878-81  (per  100  lbs.) 

English  iron,  duty  not  paid 1.70    1.70     2.06      1.70 

Londonderry  iron 1.80    1.80     2.16      1.85 

—  DebaUs,  1882,  pp.  1217-19. 


I;    . 
II 


1 


fflSTORY  OF  TARIFF  AND  BOUNTY  SYSTEM      95 

increase  of  the  price  of  pig  iron  may  have  been  partly  due 
to  the  high  quality  of  Londonderry  iron,  some  share  of  it 
certiunly  was  due  to  the  increase  of  customs  duty,  especi- 
ally as  the  margin  of  profit  changed  writh  the  increase  of 
protection  from  17  cents  per  hundred  pounds  in  1879  to  30 
cents  m  1881.  When  bar  iron  tit  Philadelphia  was  sold  for  a 
little  over  $1  per  hundredweight  in  1885,  it  was  quoted  at 
Montreal  at  $2.05  to  $2.15.  Evidently  the  Canadian  price 
was  the  Philadelphia  price  plus  transportation  charges  and 
most  of  the  duty.   The  price  of  pig  iron  at  Montreal,  as 
compared  with  the  price  at  Ferrona,  was  almost  regularly 
higher  by  the  amount  of  the  transportation  charges.  Thus, 
the  price  of  iron  in  Canada  seems  to  have  been  the  foreign 
price,  plus  costs  of  transportation,  and  a  considerable  part 
of  the  tariff.  Similar  results  seem  to  have  followed  the  re- 
visions of  1887  and  1894.   In  1887  the  bar-iron  price  Ust 
was  advanced  25  to  38  per  cent.  The  Massey-Harris  Com- 
pany declared  that  bar  won  and  steel  had  advanced  $10  to 
$15  per  ton,  pig  iron,  $2  to  $5  per  ton,  and  everything  else 
in  proportion  to  the  duties. 

A  comparison  of  prices  of  Canadian  iron  at  Ferrona, 
American  and  Scotch  iron  at  Chicago,  and  No.  1  Sum- 
merlee  iron  at  Montreal  shows  that  the  high  level  was 
maintained  in  Canada.^  Previous  to  1894  the  price  of 
iron  nt  the  furnaces  at  Ferrona  averaged  $2  to  $4  per 
ton  more  than  the  price  at  Chicago.   After  1894  when 

>  A->eTage  Monthly  Prices  of  Pig  Iron,  1888-96. 

Scotch  iron  No.  1  Summcrlee  iraa 
at  Chicago  at  Montreal 

$20.00-24.60 
21.00-25.00 


Canadian  iron     American  iron 
at  Ferrona  at  Chicago 


1888, 

1889 

1890 

1891 

1892 

1893 

1894 

1895 

1896 


$16-18 
17-18 
18-19 
16-17 
15-16 
1»-14 
12-18 
11-15 
14-15 


$17.20 
15.80 
16.75 
16.00 
14.00 
18.00 
10.50 
9.50 
10.50 


$  9.71 
11.60 
12.00 
11.45 
10.18 
10.28 
10.S8 
10.80 
11.66 


21.00-21.60 
18.25-19.00 
18.00-19.00 
19.00-20.00 
18.60-20.00 
18.50-20.00 
17.00-18.50 


—  Canadian  Mining  Manual,  1897,  pt.  ii.  pp.  75-76. 


m 
III 

a;  J. 

I- 


i 


jss^.^t^:-  :.dr:Simi^--^ 


06    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

the  scrap  iron  duty  was  increased  the  margin  of  dif- 
ference increased.  The  difference  in  price  between  Sum- 
merlee  iron  at  Montreal,  that  is  when  delivered  at  the 
chief  Canadian  market,  and  American  iron  at  Chicago 
was  even  greater.  Clearly  the  protective  policy  caused 
an  increase  in  the  prices  of  iron  and  steel  and  with  a  few 
exceptions  prif^s  were  maintained  at  a  higher  level  than 
in  other  coimtries  practically  throughout  the  period. 
The  "  Canadian  Mining  Review  "  estimated  that  over 
two-thirds  of  the  duty  was  used  to  protect  home  in- 
dustry.^ 

If  we  turn  now  to  the  finished  products,  a  somewhat  dif- 
ferent situation  is  foimd.  A  very  rapid  addition  to  the 
number  of  producing  plants  resulted  in  such  an  increase  of 
production  that,  in  1891,  the  least  weakness  of  the  market 
led  to  excessive  price-cutting.  The  organization  of  bar 
iron,  nail,  bolt  and  nut,  and  shovel  associations,  which  kept 
up  prices  more  or  less  successfully,  naturally  followed. 
Consequently  the  tariff  was  at  least  partially  responsible 
for  combinations  and  high  prices.  The  protective  iron 
schedule  of  the  tariffs  of  1879  and  1887  can  be  said  to  have 
afforded  considerable  protection  to  the  iron  and  steel  in- 
dustry, in  short,  a  protection  that  found  expression  in  higher 
prices.  Low  prices  were  secured  only  -'hen  the  American 
and  British  iron  markets  were  so  disorganized  that  the 
Canadian  producer  was  forced  to  lower  his  prices,  at  which 
time  he  made  full  use  of  the  tariff. 


§  Probably  one  o'.  the  most  objectionable  features  of 
protection  was  the  use  of  specific  and  compound  duties, 
with  an  ad  valorem  minimum  of  35  per  cent  in  many  cases. 
The  stated  object  of  ihese  duties  was  to  prevent  under- 
valuation. Specific  duties  were  warmly  befriended  as  the 
only  fair  and  sensible  duties  on  pig  iron,  since  it  is  very 
often  imp>ossible  for  the  appraiser  to  determine  the  value 
*  Canadian  Mining  Review,  vol.  xv,  p.  72. 


HISTORY  OF  TARIFP  AND  BOUNTY  SYSTEM      97 

of  pig  iron,  and  since  specific  duties  do  away  with  all  possi- 
bility of  fraud.  Fu.  ther,  as  a  spei  ific  duty  prevents  the 
importation  of  the  lower  grades  of  pig  iron,  the  quality  of 
work  is  impruved.*  Though  the  Customs  Act  provides  for 
the  use  of  sworn  invoices,  where  it  is  necessary  to  secure 
the  exact  price  of  the  goods,  this  does  not  always  result  in 
the  specific  duties  preventing  fraud.  The  great  objection 
to  specific  duties  lies  in  the  fact  that  with  the  marked 
decline  in  prices  that  took  place  between  1880  and  1896,  the 
protection  afforded  gradually  increased,  and  amounted,  as 
Sir  Wilfrid  Laurier  said  in  1894,  to  between  40  and  60  per 
cent  for  such  lower  grades  as  Alabama  coke  iron.  That 
Mr,  Foster  was  unable  to  explain  and  justify  specific  items 
in  the  tariff  of  1894'  makes  one  suspicious  that,  as  the 
farmers  have  often  claimed,  the  schedule  was  framed  by 
some  committee  of  manufacturers  and  each  item  given  the 
protection  asked  without  further  question.  Altogether, 
one  gathers  the  impression  that  the  claim  that  these  spe- 
cific duties  were  used  to  obscure  the  real  degree  of  protec- 
tion has  a  considerable  basis  of  truth.  In  many  cases  the 
duties  were  really  prohibitive  of  importation;  at  best  they 
made  an  estimate  of  the  amount  of  protection  given  almost 
impossible. 

§  9.  As  has  been  said,  it  was  expected  that  the  importa- 
tion of  iron  and  steel  would  largely  discontinue.  Let  us 
turn,  then,  for  a  moment  to  the  influence  of  the  tariff, 
especially  that  of  1887,  on  these  imports.  Altogether  there 
was  a  decrease  in  imports  from  $75,251,232  for  the  period 
1882  to  1886  to  $70,972,717  for  the  period  from  1889  to 
1893.'  Iron  and  steel  goods,  partially  manufactured  and 
for  use  as  raw  materials,  were  imported  in  large  amounts, 
averaging  about  $5,000,000  annually  from  1877  to  1896. 
Imports  of  iron  and  steel  goods  ready  for  consumption 

»  Camdian  Engineer,  vol.  in,  p.  290.  *  Debatet,  1894,  p.  2513. 

•  Catuidian  Mining  Review,  vol.  xiii,  pp.  42-4S. 


■ 


08    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 


amounted  to  $6,000,000  in  1877,  $10,000,000  in  1887,  and 
$.5,000,000  in  1896.'  Meanwhile  the  unfavorable  balance 
of  trade  had  fallen  from  $24,000,000  in  1877  to  $17,000,000 
in  1882,  to  $20,000,000  in  1888,  and  had  become  a  favor- 
able balance  of  $3,000,000  in  1896.*  The  character  of 
Canada's  trade  relations  had  changed,  but  so  far  as  figures 
show,  despite  the  iron  trade  rather  than  because  of  it. 

If  we  turn  to  pig  iron  in  particular,  we  find  an  actual 
mcrease  of  importations.   In  1884,  52,184  tons  were  im- 
ported; in  1887,  60,214  tons;  in  1890,  87,613  tons;  in  1898, 
63,522  tons.'  Of  course  this  continuance  of  importation  of 
iron  can  be  easily  explained.  Even  if  furnaces  could  have 
been  built  to  produce  all  the  country's  consumption  of  iron, 
approximately  100,000  tons  in  the  nineties,  which  could 
have  been  produced  by  one  large  modem  furnace,  or  by 
two  or  three  furnaces  of  that  period,  capitalists  would  have 
had  little  temptation  to  erect  the  furnaces.   The  market 
was  very  scattered,  and  very  apt  to  be  an  aggregate  of 
small  orders.   In  some  work,  such  as  castings,  Canadian 
iron  could  scarcely  be  used  at  all  because  Canadian  fur- 
naces did  not  turn  out  the  necessary  grade.   No  furnace 
c.Mild  turn  out  all  grades  from  Bessemer  to  foundry  iron. 
In  short,  there  was  little  hope  for  good  returns  on  an  in- 
vestment in  the  Canadian  pig-iron  business,  and  no  matter 
what  the  ambitions  of  Canadian  producers,  Canada  could 
not  have  got  along  well  without  importing  some  American 
or  British  pig  iron. 


§  10.  Opposition  to  the  duties  on  pig  iron,  scrap  iron, 
and  bar  iron  was  particularly  strong.  Very  important  inter- 
ests objected  to  the  principle  that  these  raw  materials  for 
nearly  every  other  Canadian  industry  should  be  taxed. 
On  these  grounds  Mr.  Bourassa  and  Mr.  Charlton*  ob- 


I  ii 

ifl' 


»  Canadian  Statistical  Year-Boole,  1904. 

«  Canaiia  Year-Book,  1912,  p.  94. 

>  See  Api)endix  G.  *  DcbaUt,  1879,  p.  1447. 


^iS^ 


,  HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM      99 

jected  to  the  duties  in  1879.»  In  1881  Mr.  Burpee,  a  rolling- 
mill  owner  from  St.  John,  New  Brunswick,  and  in  1887, 
J.  Pender  &  Co..»  of  St.  John,  protested  that  the  prices  of 
these  raw  materials  were  rising  and  were  likely  to  ruin 
certain  branches  of  the  trade.  In  1892  Mr.  J.  V.  Hodgson, 
of  Montreal,  the  only  manufacturer  of  wrought-iron  tubing 
in  Canada,  closed  his  works  indefinitely  because  the  high 
dti^y  on  his  raw  material  made  the  industry  unprofitable. 
Li        ■>«,  the  manufacturer3  of  agricultural  implements, 
the  most  important  producers  of  finished  products,  com- 
plained that  the  rolling  mills  had  prospered  under  the 
protection  of  35  per  cent,  until,  becoming  too  extensive  for 
the  consuming  capacity  of  the  country,  they  had  failed  and 
later  formed  combinations.    Thereafter  the  rolling  mills 
fully  utilized  the  duties  on  bar  iron,  getting  not  only  what 
was  intended  for  themselves,  but  also  what  was  intended 
for  the  miners,  the  pig-iron  producers,  and  even  the  pro- 
tection that  was  intended  for  the  producers  of  finished 
products.  Accordingly,  the  producers  of  finished  products 
wanted  to  have  the  duties  on  bar  iron  reduced  to  enable 
them  to  enter  the  domestic  and  export  trade  on  fair  terms 
with  other  countries. 

One  can  easily  see  how  these  high  duties  would  injure  the 
production  of  finished  products,  but  it  is  not  so  evident  at 
once  that  the  producers  of  pig  iron  and  puddled  bars  could 
not  get  the  full  benefit  of  the  increase  of  duties  after  1887. 
The  secret  lies  in  the  relatively  low  duty  on  wrought  scrap 
iron,  which  was  admitted  at  $2  per  ton  (the  previous  duty 
on  both  pig  iron  and  scrap),  while  pig  in)n  and  puddled 
bars,  with  which  scrap  Iron  cam  mto  competition,  were 
charged  U  and  $9  respectively  after  1887.  The  Govern- 
ment naturally  intended  to  encourage  the  manufacture  of 
bar  iron  from  puddled  bars  made  in  Canada  from  Canadian 
pig  iron,  but  the  discrimination  in  favor  of  imports  of  scrap 
iron  went  far  to  nullify  the  additional  protect-on  afforded 
I  DebiUet,  1882.  p.  12«3.  '  Ibid,  1887.  p.  Iil3. 


•1 


!^ir^ 


L 


100    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 


!  r-i. 


! 


n 


Si' 


Al 


pig  iron  and  puddled  bars.  The  rolling-mill  interests  were 
able  to  secure  an  abundance  of  raw  materials  at  prices 
much  lower  than  were  profitable  for  iron  smelters  and  man- 
ufacturers of  puddled  bars.  In  fact,  nearly  all  the  raw 
material  for  bar  iron  and  casting  work  was  imported.  Thus, 
deprived  of  a  profitable  market  for  forge  iron  and  puddled 
bars,  capitalists  did  not  dare  to  establish  puddling  works 
commensurate  with  the  Canadian  consumption.  As  a  con- 
sequence, no  bar  iron  was  manufactured  from  Canadian 
puddled  bars  until  after  1894,  when  the  scrap-iron  duty 
was  raised  to  $4  per  ton.  In  tu.-n,  the  development  of  the 
pig-iron  industry  was  limited  to  the  demand  for  pig  iron 
for  foundry  work  and  for  steel-making  purposes.  Thus, 
although  the  bulk  of  the  bar  iron  ''sed  in  Canada  was 
turned  out  by  Canadian  mills,  the  few  Canadian  blast  fur- 
naces and  puddling  works  were  not  continuously  in  blast 
for  any  length  of  time.* 

Those  interested  in  pig-iron  production  soon  began  to 
protest  against  this  apparently  unjust  discrimination. 
They  argued  that  it  was  impossible  to  manufacture  good 
bar  iron  from  wrought  scrap,  and  claimed  that  merchant 
iron  rolled  from  old  rails,  tubes,  boiler  plate,  old  ship 
plates,  railroad  springs,  discarded  axles,  and  similar  ma- 
terial was  in  no  respect  equal  to  iron  made  from  puddled 
bar,  and  that  every  manufacturer  who  used  iron  made  from 
scrap  knew  to  his  sorrow  that  the  product  was  never  regular 
in  texture  and  grain,  had  hard  and  soft  spots  in  it,  and  was 
reedy  and  open -grained.  They  believed  that  had  the  mill 
proprietors  been  forced  by  a  hea*^  duty  on  scrap  iron  to 
put  in  puddling  furnaces  or  to  buy  puddled  bars  from  pig- 
iron  producers  who  turned  pig  iron  into  bars,  both  the  pro- 
ducers and  consumers  of  finished  products  would  benefit  by 
reason  of  the  better  quality  of  finished  goods.  The  pro- 
ducers of  pig  iron  argued  that  the  rolling-mill  men  had 
even  been  forced  to  invest  in  special  plants  for  the  treat- 

'  Iron  Age,  Vol.  U,  p.  430. 


J^^M 


I  ? 


fflSTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    101 

ment  of  scrap  iron.*  In  reply  the  roUmg-mUl  owners  said 
that,  as  a  matter  of  fact,  to  secure  a  satisfactory  product, 
scrap  iron  had  to  be  mixed  with  pig  proper,  and  thus  scrap 
iron  to  some  extent  facUitated  the  use  of  pig  iron.^  The 
same  rolls  could  be  used  whether  bar  iron,  scrap  iron,  or 
puddled  bars  were  used,  and  even  if  the  duty  on  scrap  were 
raised  to  a  prohibitory  point,  the  domestic  producers  of 
pig  iron  could  not  have  profited  greatly,  since  much  of 
the  scrap  iron  was  purchased  in  the  c^mtry,  and  since 
producers  of  puddled  bars  had  not  the  facUities  to  produce 
a  large  enough  output  at  the  price  at  which  bars  could  then 

be  imported.' 

Down  to  1892  there  were  but  three  blast  furnaces  m 
Canada;  two  in  Quebec,  and  one  in  Nova  Scotia.  But,  as 
we  shall  see,  the  Canada  Iron  Furnace  Company  had  taken 
over  the  plant  at  Radnor  in  1889,  the  New  Glasgow  Coal, 
Iron  and  RaUway  Company  bmlt  a  furnace  in  1892,  and 
the  HamUton  Blast  Furnace  Company  was  contemplating 
building  in  1893.  The  necessity  of  increasing  the  duty  on 
scrap  ux)n  was  urged  with  new  vigor.  It  was  proposed,  in 
1892,  that  the  difficulty  should  be  rectified  by  nammg  a 
date  on  which  scrap  iron  should  be  charged  the  same  duty 
as  puddled  bars  or  soft-steel  billets,  and  that,  in  the  mean 
time,  a  bounty  should  be  paid  on  puddled  bars  and  steel 
billets  made  in  Canada  from  Canadian  pig  iron.*  When 
the  tariff  was  altered  in  1894,  the  duty  on  scrap  iron  was 
advanced  to  $3  per  ton  for  one  year,  and  thereafter  to  $4, 
Since  the  duty  on  puddled  bars  was  reduced  from  $9  to  $5, 
a  bounty  of  $2  per  ton  on  puddled  bars  produced  in  Canada 
from  Canadian  pig  was  provided  for.   The  Government 
thus  aimed  at  stimulating  the  pig-iron  industry  and  the 
production  of  puddled  bars  without  greatly  increasing  the 
cost  of  the  raw  material  of  rolling  mills.  The  amount  of 
scrap  iron  imported  promptly  fell  off,  from  569,907  tons  m 

1  Canadiun  Engineer,  vol.  I.  p.  308.  '  DebaUa,  1888  p.  498 

»  Iron  Afc.  voi.  UU.  p.  S57,  *  Canadian  Engineer,  vol.  I,  p.  308. 


■n 


■^■Ifi 


102    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

1893,  to  91.169  tons  in  1897.»  Part  of  this  decrease  was  due 
to  the  depression  of  1893  to  1897,  as  well  as  to  the  increased 
use  of  steel;  yet  the  scrap-iron  duty  undoubtedly  had  some 
effect.  Moreover,  the  bounty  on  puddled  bars  seems  to 
have  stimulated  production,  because  in  1895  the  Ontario 
Rolling  Mills  put  in  a  puddling  furnace  with  a  capacity  of 
four  tor's  a  day,*  and  the  Londonderry  Iron  Company  was 
able  to  make  contracts  for  puddled  bars  with  several 
Canadian  bariion  manufacturers.*  But  judgment  as  to 
whether  this  change  in  1894  was  a  wise  oue  may  be  deferred, 
pending  a  consideration  of  the  history  of  the  industry  and 
the  value  in  general  of  the  protective  policy. 


i. .  1 1 

1 1 


§  11.  The  iron  duties  were  without  question  a  source  of 
great  diflSculty  to  the  party  in  power.  Interests  within  the 
industry  were  easily  antagonized  by  discrepancies.  The 
duties  on  finished  products  fell  heavily  on  the  consuming 
public;  those  on  secondary  products,  such  as  bar  iron  and 
steel,  were  a  burden  to  the  consuming  manufacturers;  and 
those  on  scrap  iron,  pig  iron,  and  puddled  bars  were 
opposed  by  the  rolling-mill  interests.  The  producers  of  pig 
iron  were  asking  for  increased  protection  on  pig  iron  and 
puddled  bars  and  higher  duties  on  wrought  scrap,  but  it 
was  quite  impossible  to  increase  these  duties  to  tiie  satis- 
faction of  the  pig-iron  producers.  The  desirability  of  hav- 
ing free  or  cheap  raw  materi  J,  a  natural  corollary  of  the 
national  policy,  was  particularly  applical'le  to  the  importa- 
tion of  iron  and  steel.  Yet  the  primary  industry  was  de- 
manding considerable  attention.  Everj-  one  desired  devel- 
opment, and  political  interests  demanded  assisUnce.  A 
-^rtain  amount  of  protection  was,  therefore,  accorded, 
especially  in  the  revision  of  1894. 

But  earlier,  as  we  have  seen,   the  bounty  system  was 

*  See  Appendix  G,  Table  II. 

*  Canadian  Mining  Review,  vol.  xiv,  p.  11. 

*  Ibid.,  vol.  XV,  p.  105. 


i  1 


■M 


fib- 


fflSTORY  OF  TARIFF  AND  BOUNTY  SYSTEM     103 

i    n 

introduced  as  an  easier  solution  of  the  difficulty.  As  early  ,  ? 

as  1883  direct  and  assured  aid  was  given  in  the  form  of  ,:| 

bounties  on  Canadian  pig  iron  made  from  Canadian  ore.  X\ 

These  obviated  the  necessity  of  a  rearrangement  of  the 
whole  iron  and  stsel  schedule.  It  was  argued  that,  as  there 
were  only  three  furnaces  ui  operation,  producing  not  more 
than  29,593  tons  out  cf  a  consumption  of  81,777  tons  in 
1884,1  the  production  of  pig  iron  in  Canada  could  not  |j 

supply  the  total  demand  for  several  years.'^  The  granting  |;j 

of  the  bounty  on  puddled  bars  in  1894  was  intended  to  || 

offset  the  reduction  of  the  duty  from  $9  to  $5.  I? 

The  Liberal  opposition  objected  to  this  phase  of  the  I; 

national  poV  .y  as  vigorously  as  it  opposed  the  mcrease  of  H 

duties  in  1879  and  1887.    It  was  pointed  out  that  local  ^ 

feeling  had  prompted  this  bounty  legislation  in  favor  of 
Nova  bcotia  interests,  and  that  bounties  were  extended 
for  the  convenience  of  the  manufacturing  interests.'  The 
Liberal  Party  also  argued  that  to  extend  the  bounty  law 
beyond  the  life  of  one  parliament  was  a  political  injustice.* 
More  important  was  the  objection  that  the  system  in- 
volved a  very  considerable  increase  of  taxation,  while  the 
industry  seemed  to  undergo  but  slight  development  and 
entirely  failed  to  shut  out  imports.  Altogether,  $781,221.72 
was  paid  out  by  the  Dominion  during  the  years  1883  tc 
1897  on  an  output  of  471,066  tons.  In  no  one  year  did  th  r 
output  exceed  62,522  tons.  Only  three  timts  did  it  exceed 
40,000  tons,  and  in  1891  it  fell  as  low  as  20,153  tons.  Im- 
ports of  pig  iron  never  fell  below  28,000  tons,  and  only  four 
times  below  45,000  tons.  In  other  words,  over  half  of  the 
total  consumption  of  pig  iron  was  imported."    That  the 
bounty  payments  did  not  increase  so  much  as  was  feared 
by  the  Liberal  Party,  and  that  the  output  increased  even 

1  Canada  Year-Book,  1908,  p.  619;  see  Appendix  B,  Table  I. 
«  Debate*,  1883,  p.  711. 
»  Iron  Age,  vol.  lxx,  September  18,  p.  19. 
;  *  Debstes,  1890.  p.  9S28.  »  See  Appendix  B,  Table  I. 


^1: 


.. 


li 


104    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

less,  is  evidence  that  for  some  reason  the  system  of  bounty 
payments  had  failed  to  realize  all  the  success  hoped  for  it. 

§  12.  There  is  ample  reason,  then,  for  questioning  the 
wisdom  of  protecting  the  various  branches  of  the  iron 
industry  during  the  period  under  consideration.  Already 
a  number  of  counts  stand  against  the  policy.  Contrary  to 
expectation,  the  unfavorable  balance  of  trade  was  not 
wiped  out  by  the  duties  on  L'-on  and  steel  products,  which 
were  imported  m  very  large  quantities;  prices  were  ad- 
vanced behind  the  wall  of  transportation  charges  and  cus- 
toms duties,  and  if  necessary,  cojabination  was  resorted  to. 

Even  within  the  industry  tnere  was  disagreement;  the 
producers  of  primary  products  wanted  protection,  and  the 
producers  of  finished  products  wanted  either  low  duties  on 
their  raw  materials  or  higher  compensatory  duties  or  their 
equivalent  on  the  finished  products.  The  bounty  system 
was  a  political  makeshift,  adopted  and  modified  from  time 
to  time  according  to  the  necessities  of  the  situation.  The 
use  of  specific  duties  deceived  the  public  and  possibly  the 
legislators  themselves.  Uncertainty  regarding  the  system 
was  not  the  least  evil. 

So  much  for  the  standard  objections  to  the  system  — 
objections  that  were  applicable  to  the  Canadian  policy 
prior  to  1897.  But  if  the  system  had  really  developed  a 
large  and  important  mdustry,  some  or  all  of  these  evils 
might  have  been  forgiven.  Although  it  is  a  common  fallacy 
to  regard  the  wisdom  of  a  protective  policy  as  finally 
proved  if  it  can  be  shown  that  an  extensive  industry  has 
been  thereby  produced,  or,  more  commonly,  if  it  can  be 
proved  that  the  industry  grew  up  during  a  period  of  high 
duties,  rarely  are  the  costs  of  the  system  to  the  taxpaying 
and  consuming  public  given  due  consideration.  Rarely  do 
politicians  or  manufacturers  clamoring  for  protection  con- 
sider the  various  outside  factors  that  may  have  contributed 
to  the  expansion  of  the  industrj^,  or  the  actu^il  extent  to 


Jlfa 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM     105 

which  the  protective  system  alone  may  have  been  respon- 
sible. 

As  only  two  furnaces  m  Quebec  and  one  in  Nova  Scotia 
existed  in  1879  in  aU  Canada,  the  protective  policy  had 
ample  opportunity  to  prove  its  value  by  stimulating  the 
growth  of  the  industry.  To  learn  whether  or  not  it  suc- 
ceeded is  a  partial  purpose  of  the  following  chapter,  devoted 
as  it  is  to  a  consideration  of  the  extent  and  the  causes  of  the 
development  of  the  Canadian  iron  and  steel  industry  from 
1879  to  1897. 


s 


C        ill 


I 


■:r.ij 


if  .1 


v.    urn 


m 


tm 


CHAPTER  \I 


THE  DEVELOPMENT  OF  THE  INDUSTRY* 

§  1.  Of  the  iron  and  steel  plants  still  in  existence  in 
1879,  that  at  Lou  londeny,  under  the  control  of  a  company 
formed  to  make  a  commercial  test  of  the  Siemens  open- 
hearth  process,  was  by  far  the  most  important.  It  could 
not,  however,  be  called  a  success.  A  large  plant,  including 
ten  turnaces,  had  been  built  at  an  expenditure  of  $1,250,000. 
As  the  Bessemer  process  was  then  the  only  method  ac- 
cepted for  the  production  of  steel  on  a  large  scale,  there  was 
very  little  demand  for  the  large  output  the  works  were  de- 
signed to  produce.''  The  accidental  location  of  the  Acadia 
Iron  Furnace  at  Londonderry  seems  to  have  given  occasion 
for  the  choice  of  a  situation  for  the  plant  of  this  new  com- 
pany, which  was  against  all  successfij  working.  Since 
charcoal  was  no  longer  used  as  fuel,  the  woodlands  were  of 
little  use.  Coal,  which  was  never  discovered  on  the  prop- 
erty, had  to  be  brought  twenty-four  miles  from  Springhill, 
or  fifty  miles  from  Pictou.'  At  this  time  only  one  Nova 
Scotia  colliery  mined  suitable  coal,  and  the  owners  had  the 
only  coke  oven  in  the  country;  so  they  supplied  coke  at 
their  owti  price.  Wlien,  one  day,  an  explosion  closed  this 
mine,  coke  was  not  to  be  had  at  any  price,  and  the  blast 
funiace  had  to  be  shut  down  with  a  heavy  loss.  After  this 
the  iron  company  built  coke  ovens  of  its  own  and  became 
to  some  extent  independent.  WTien  finally  a  coal  mine  was 
purchase  1  and  fully  equipped,  the  coal,  after  many  trials, 
was  found  almost  unfit  for  use.  There  was  a  considerable 
supply  of  ores  and  fluxing  materials,  but  the  ores  were  hard 

*  For  the  geographical  location  of  the  plants  described  see  the  maps  in 
the  Appendix. 

*  Coiiiery  Guardian,  vol.  lxxxi,  p.  307.  '  Ibid.,  p.  307. 


t 


THE  DEVELOPMENT  OF  THE  INDUSTRY     107 

and  a  mixture  with  other  qualities  was  almost  a  necessity^* 
Instead  of  rumxing  a  general  store  from  which  a  consid- 
erate revenue  nfight  have  been  secured  the  company 
Tanted  the  privilege  to  some  outsider  who  took  advanta^ 
S  his  opportunity  to  overcharge.  It  is  not  surprising,  then 
that  in  spite  of  the  protective  duties  of  $2  a  ton  and  a 
bounty  of  $1.50  per  ton  on  pig  iron,  the  eompany  w^  m 
liquidation  by  1883,  and  the  plant  was  for  sale  »«  1886^ 

In  1887.  the  Londonderry  Iron  Company,  which  was 
formed  to  take  over  the  plant,  began  to  turn  out  large 
quTntities  of  puddled  bars  and  to  roll  them  into  bar  iror. 
For  a  time  the  "Siemens"  brand  of  bar  iron  was  recognized 
as  having  high  qualities,  and  it  compared  favorably  with 
^e  ordinary' mported  iron.  The  puddled  bars,  to^  were 
of  good,  strong  quality  and  formed  an  exceUent  mixture 
with  the  best  grades  of  Scotch  iron,  which  were  more  open 

and  fluid  in  nature.  .         , 

Shortly  after  this  scrap  iron  came  into  almost  universal 
use  for  the  manufacture  of  bar  iron  in  Canada,  and  the 
company  was  forced  to  close  the  puddling  furnaces^  until 
18^^  at'^'hich  time  the  duty  on  puddkd  bars  was  reduced 
the  duty  on  scrap  iron  increased,  and  «  bounty  of  $2  per 

ton  on  puddled  bars  given  -^^-^"^P^^^^^^^^-^I^^P^^The 
tion  of  pig  iron  continued  to  be  a  source  of  difficulty.  The 
ocal  supply  of  ore  would  not  keep  more  than  one  furnace 
going;  ores  from  Woodstock,  New  Brunswick,  were  phos- 
phomus  and  those  at  Londonderry,  while  practically  pm^ 
were  magnetic,  and,  therefore,  hard  to  smelt.^  Royalty 
IL  oTore  deposits  in  the  Nictaux-Torbrook  ^  jre 
secured,  and  in  1891  an  additional  furnace  was  lighted  to 
smelUhese  ores,  which  were  suppUed  by  the  Torbrook  Iron 
Company.* 

»  Canadian  Mining  Review,  vol.  v,  pp.  8-9. 
«  Canadian  Mining  Manual,  1897.  pt.  ii.  p.  74. 
>  Monetary  Time.t,  vol.  xxiv,  p.  .595. 
*  Canadian  Mining  R^yiew,  voL  xxi,  p.  «• 


W 

lit 


I 

i     , 
i    [ 


ill 


ii 


^•If 


\l 


108    THE  CAN.VDIAN  IRON  AND  STEEL  INDUSTRY 

The  company  could  not  compete  in  the  open  market  at 
current  prices  for  pig  iron;  so  it  used  a  large  part  of  its 
product  at  its  own  finishing  plants,  the  pipe,  axle,  and  forge 
foundries,  and  the  rolling  mill.'    In  1890  the  works  were 
partly  rebuilt  and  operated  more  economically  by  a  new 
manager.^    An  increase  in  protection  in  1894  led  to  the 
building  of  a  new  pipe  foundry."  Yet,  from  1894  to  1896. 
a  time  of  low  prices,  the  company  was  continually  in  finan- 
cial difficulty.   In  18.95  it  had  a  deficit  of  $60,306.   A  tem- 
porary disadvantage,  occasioned  by  the  supply  of  inferior 
fuel,  made  matters  worse.  When  a  dirty  seam  of  coal  had 
been  struck  by  the  Acadia  Coal  Company  which  furnished 
the  coke,  operations  were  retarded  and  the  furnace  more 
or  less  impaired.  Drought  reduced  tht  water  supply  and 
caused  frequent  stoppages.  The  product  was  therefore  of 
low  grade.   Moreover,  a  large  stock  of  merchant  iron  on 
hand  represented  an  embarrassing  loss  of  interest,  and  cur- 
rent indebtedness  was  in  excess  of  liquid  assets.   The  com- 
pany had  either  to  dissolve  or  right  itself  by  means  of  some 
mtemal  rearrangement.  <    In  1896  there  was  a  slight  im- 
provement in  conditions,  and  all  departments  were  em- 
ployed to  their  full  capacity.  But  the  prosperity  was  only 
temporary.  The  company  was  soon  hopt  lessly  embarrassed 
and  unable  to  pay  its  fixed  capital  charges. 

§  2.  Quebec,  too,  maintained  its  reputation  as  an  iron- 
producing  province.  Shortly  after  1875  Mr.  George 
McDougall,  of  Montreal,  leased  tne  car-wheel  foundry  at 
Three  Rivers,*  and,  to  supply  the  charcoal  iron  necessaiy. 
bought  the  St.  Maurice  Forges,  which  he  operated  until 
bounties  were  granted  in  1883.«  Since  the  supply  of  iron 
was  still  insufficient,  he  built  two  charcoal  furnaces  at 

>  BuUetin  of  the  Iron  and  SUel  A^ocialwn.  vol.  xxvi,  p.  268 

Monetary  Time*,  vol.  xxiv,  p.  193. 
'  Canadian  Mining  Rerieit,  vol.  vni  p  268 

I  {,'■'"'  ^?''  ^°!-  '-••'''.  P-  863-  '  BartleU.  op.  cit.,  p.  519. 

tanadmn  Mining  Manual,  1897.  pt.  ii,  p.  eo. 


THE  DEVELOPMENT  OF  THE  INDUSTRY     109 

Drummondville  as  early  as  1880  and  1881.  Both  furnaces 
produced  charcoal  car-wheel  iron  from  limonite  or  bog 
ores  found  in  the  vicinity.  Wood,  procured  in  the  neigh- 
borhood, was  converted  into  charcoal  at  the  works.   The 
whole  output  of  5000  tons  a  year  was  manufactured  into 
high-grade  car  wheels  at  Three  Rivers  and  Montreal.' 
These  furnaces,  although  not  of  great  importance,  if  the 
quantity  of  the  product  be  taken  as  an  index,  were  never- 
theless a  valuable  source  of  iron  of  a  special  grade,  and  so 
continued  in  operation  throughout  the  period  in  question.' 
Before  1879  the  manufacture  of  iron  at  Radnor  had  been 
gradually  discontinued,  because  the  owners  were  handi- 
capped by  lack  of  shipping  facilities  and  of  capital.   It  also 
seemed  impossible  to  secure  any  large  and  regular  supply  of 
iron  ore;  the  capacity  of  the  furnace  was  limited  and  the 
operations  irregular.   As  a  result,  it  was  difficult  to  manu- 
facture any  great  quantity  of  the  special  grade  of  iron 
which  was  made  into  car  wheels  at  Lachine,  Quebec,  or  at 
St.  Thomas,  Ontario.' 

The  Canada  Iron  Furnace  Company  was  formed,  never- 
theless, in  1889  to  acquire  the  properties,  rights,  and  all  ac- 
cessories, which  included  the  forges,  sixty  workmen's  cot- 
tages, a  limestone  quarry,  perfected  water  power,  a  railroad 
line,  bridges  and  sidings,  a  car-wheel  shop  and  shipping 
dock  at  Three  Rivers,  property  for  charcoal  kilns  and 
water  power  at  Grandes  Piles,  Quebec,  the  ore  deposits  at 
Lac  a  la  Tortue,  with  ore  rights  over  100,000  acres  of  bog 
ore-bearing  lands  in  the  St.  Maurice  district.* 

Prospecting  for  an  increased  supply  of  ore  was  com- 
menced and  pushed  for  a  year.  Many  leases  and  purchases 
were  made  in  anticipation  of  future  development.  Since 
the  results  at  the  works  were  good,  and  a  demand  existed 

•  Bartlctt.  op.  cU.,  p.  520.  »  Canadian  Engineer,  vol.  in.  p.  263. 
s  P.  Griffin,  "Canada  Iron  Furnace  Company,"  Tramacttons  of  the 

American  Institute  of  Mining  Engineers,  voL  xxi,  p.  974. 

*  Canadian  Mining  Review,  vol.  xii,  p.  15. 


-'jit 


•ill      t: 


Si 


^     I 

■  i- 

- 1' 

Mi, 

^i^  If 


no    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

for  the  product,  the  r  ompany  decided  to  double  its  output, 
and  after  oi)erating  the  old  stone  stack  for  two  vears,  built 
a  new  furnace  in  1892. 

Many  difficulties  had  to  be  overcome.  American  furnace- 
men  could  purchase  raw  material,  such  as  ore  and  charcoal, 
in  the  open  markets,  but  Canadian  companies  had  to  pro- 
vide workmen  for  the  entire  cut  of  wood,  had  to  transport 
the  wood  to  the  charcoal  kilns,  and  the  charcoal  to  the  fur- 
naces, to  mine  the  full  supply  of  ore,  and  quarry  all  the  lime- 
stone. •  The  farmers  who  brought  in  ore  gave  trouble  by  re- 
fusing to  conform  to  the  English  standards  of  weights  and 
measures.'^  Nevertheless,  the  nature  of  the  product  was 
such  as  to  make  its  production  profitable.  It  was  consistent 
in  quality  and  well  tested  by  actual  results.  It  was  espe- 
cially valuable  to  foundiy-men  because  it  remedied  shrink- 
ing and  produced  true-grained  and  very  strong  castings. ' 
With  the  rapid  growth  of  the  transportation  irdustry  in 
Canada,  the  demand  for  such  a  product  naturally  grew.  In 
fact,  in  1896  the  Canadian  railroads,  with  few  exceptions, 
w^ere  using  car  wheels  made  of  this  iron,  and  the  company 
was  able  to  of>en  up  foreign  markets  in  the  United  States 
and  Europe.*  Labor  for  securing  ore  and  wood,  supplied  in 
the  slack  seasons  by  the  habitants  of  the  district,  was  cheap 
and  abundant.  Excellent  water  power  for  operating  the  ore 
and  stone  crushers  and  for  pumping  water  was  secured  from 
the  Riviere  a''.  Lard.  The  abundance  of  wood  suitable  for 
charcoal  was  unquestioned  and  the  bog  ore  deposits  proved 
quite  satisfactory.^  The  company  found  it  practicable  to 
establish  wood  and  ore  deposits  from  which  shipments 
might  be  made  by  rail  to  the  furnace,  seventy-five  to  one 
hundred  miles  away.*  It  is  not  surprising  that,  under  such 
conditions,  the  company  had  considerable  success. 


1  f^tnadian  Mining  Renew,  vol.  xii,  p.  47. 

'  t'lnadian  Engineer,  vol.  in,  p.  202. 

*  Monetary  Times,  vol.  xxiv,  p.  1302. 

"  Ibid.,  p.  oOX 


*  Ibid.,  p.  47. 


Griffiu,  up.  cil.,  pp.  977-78. 


THE  DEVELOPMENT  OF  THE  INDUSTRY     111 

§  3.  One  rather  unprofitable  and  discouraging  enter- 
prise, one  failure,  and  two  other  small  but  relatively  suc- 
cessful plants  have  been  described.  We  find  in  this  period 
the  first  appearance  of  what  has  since  become  one  of  the 
most  importrnt  of  Canada's  iron  and  steel  plants,  that  at 
Trenton  and  New  Glasgow,  Nova  Scotia. 

Previous  to  1  «579  a  fairly  prosperous  industry  had  grown 
up  at  Trenton  Nova  Scotia,  in  the  hands  of  the  Nova 
Scotia  Forge  Company.  Then  wrought  and  scrap  iron  were 
used  as  raw  material.  But  a  change  was  going  on  in  the 
steel  industry,  and  mild  steel  began  to  replace  wrought  iron 
in  the  manufacture  of  car  axles  and  in  general  forge  work. 
This  fact,  together  with  the  difficulty  of  securing  raw  ma- 
terial for  a  rapidly  expanding  trade,  suggested  the  advisa- 
bihty  of  making  steel  from  imported  scrap  steel  and  pig 
iron.  After  a  careful  survey  of  the  situation,  the  manage- 
ment decided  to  embark  on  a  new  enterprise,  and  in  1882 
formed  the  Nova  Scotia  Steel  Company  to  manufacture 
steel  by  the  Siemens-Martm  open-hearth  process.  After  a 
year  of  ronstruction  work  the  first  stec' "  ^ots  were  cast  in 

1883. 

The  original  forge  company  soon  became  a  lai^e  buyer 
of  steel  ingots  and  billets  from  the  new  concern-  which  was 
in  turn  dependent  on  the  forge  for  repairs  and  machine 
work.  Interdependence,  community  of  interest,  and  the 
desirability  of  assuring  economy  of  operation  led  to  the 
amalgam-'tion  of  the  two  companies  as  a  joint  enterprise, 
known  as  the  Nova  Scotia  Steel  and  Forge  Company.^ 
After  extensions  had  been  made,  an  excellent  business  was 
carried  on  in  railway  fishplates,  plough  plates,  nail  plate, 
bars  and  angles,  tie  plates,  steel  for  agricultural  imple- 
ments, merchant  steel  in  rounds,  flats,  and  squares,  angles 
and  special  sections,  rivet  steel,  tramway  and  pit  rails.* 

But  this  system  of  working  imported  pig  iron  and  scrap 

»  Induntricd  Canada,  vol.  ii,  p.  328. 
"  Canada  Mining  Review,  vol.  v»,  p.  a7. 


if 


-  V  I 

'SI, 


^^^ 


112    THE  C.VNADIAN  IRON  AND  STEEL  INDUSTRY 

material,  quite  satisfactory  for  a  small  output,  did  not  allow 
of  any  great  expansion.  The  company  thought  it  undesir- 
able to  be  dependent  on  the  local  supply  of  scrap  iron  and 
imi)ort8  of  pig  iron,  and  decided  to  manufacture  its  own  pig 
iron  to  make  sure  of  its  raw  material.'  Consequently,  in 
1888,  when  the  iron  ores  of  the  East  River  district,  Pictou 
County,  were  receiving  considerable  attention,  the  prelim- 
inaries were  instituted  for  building  a  blast  furnace  at  Fer- 
rona,  or  North  New  Glasgow  *  As  the  construction  of  the 
bias':  furnaces  would  cost  $500,000,  exclusive  of  mining 
projjerties  'ind  operation  of  iron  mines,  and  as  a  section  of 
the  directo'  \te  was  unwilling  to  assume  the  risk  involved 
in  undertaking  so  extensive  a  project,  a  new  company,  the 
New  Glasgow  Coal,  Iron  and  Railway  Company,  was 
formal.  The  company  acquired  suflBcient  brown  and  red 
hematite  ores  by  purchase  and  lease  to  warrant  the  estab- 
lishment of  a  modem  blast  furnace  of  large  capacity.'  The 
mines  were  thirteen  miles  from  the  Intercolonial  Railway; 
so  a  railway  was  built  connecting  the  furnace  with  the 
mines  and  limestone  quarry.  The  site  of  the  ironworks  was 
at  Ferrona,  an  admirable  spot  at  the  junction  of  the  two 
railways.  The  contract  for  a  blast  furnace  was  let  and 
work  was  begim  in  1891.  Storehouses,  blacksmith  and 
carpenter  shops,  coal  and  ore  washing  plants,  and  coke 
ovens  were  also  installed.  By  1892  the  company  was  sup- 
plying pig  iron  to  thvi  Nova  Scotia  Steel  and  Forge  Com- 
pany, and  foundry  iron  to  most  of  the  foundries  in  the 
Province.  The  fctre  company  took  more  than  half  of  the 
output.* 

The  product  was  of  very  good  quality  for  the  manufac- 
ture of  steel,  but  the  manganiferous  character  of  the  ores 
around  New  Glasgow  gave  the  company  some  trouble  in 
the  manufacture  of  foundry  pig  iron.   To  solve  this  diffi- 


'  Industrial  Canada,  vol.  ll,  p.  328. 

•  Industrial  Canada,  vol,  ll.  p,  328. 

*  Canadian  Mining  Review,  vol.  xii,  p.  115.  ' 


»  DebaUs,  1894,  p.  2346. 


THE  DEVELOPMENT  OF  THE  INDUSTRY     113 


culty,  the  company  acquired,  in  1894,  a  large  iron  ore  de- 
posit on  Bell  Island,  in  Conception  Bay,  Newfoundland. 
The  mines  were  opened,  a  double-track  railway  was  built 
to  the  shipping  pier,  and  suitable  mining  machinery  was 
installed.  When  storage  iKJckets  and  piers  had  l)een  built, 
by  Decemlier,  1895,  ore  was  shipped  to  Ferrona,  and  the 
proportion  of  manganese  was  brought  down  to  a  suitable 
percentage  for  foundry  iron.'  Consequently  an  outlet  was 
found  for  the  other  half  of  the  output. 

The  existence  of  the  steel-works  was  a  very  great  advan- 
tage. The  community  of  interest  and  interdependence  of 
the  two  companies  is  a  very  interesting  and  important  fea- 
ture of  the  development  of  the  iron  industrj'of  Nova  Scotia. 
The  Nova  Scotia  Steel  and  Forge  Company,  with  its  in- 
creasing demand  for  structural  steel,  was  willing  and  glad 
to  absorb  an  increasing  output  of  pig  iron.*  On  the  other 
hand,  the  more  the  steel  company  expanded,  the  more  the 
blast  furnace  company  prospered.  Thus,  the  New  Glasgow 
Coal,  Iron  and  Railway  Company  weathered  with  relative 
ease  the  depression  and  American  competition  in  the  period 
1893  to  1896.'  The  obvious  community  of  interest  suggested 
the  advisability  of  consolidating  the  two  companies.  They 
amalgamated  in  1895  under  the  name  of  the  Nova  Scotia 
Steel  Company.  When  the  steel  plant  was  extended,  the 
blast  furnace  was  able  to  operate  more  economically  by 
le  gthening  the  runs  in  making  steel  material.* 

Wonderful  progress  had  betn  made  in  little  more  than  a 
decade.  A  small  forge  works  nad  expanded  into  a  steel 
plant  using  imported  scrap  and  pig  iron,  and  this  into  a 
fully  rounded-out  iron  and  steel  plant  carrying  on  all  opera- 
tions from  the  mining  of  ore  and  coal  to  the  manufacture  of 
quite  unexcelled  forgings  on  a  relatively  extensive  scale. 

'  Canadian  Mining  Manual,  1897,  pt.  ii.  p.  S5. 

*  Canadian  Mining  Review,  vol.  xi,  p.  85. 

*  Ihid,  vol.  XIV,  p.  4. 

*  Ibid.,  p.  !iaO. 


i    ^*, 


r.t 

M 


lU    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 


;  i : 


§  4.  All  the  iron  and  steel  plants  of  this  period  men- 
tioned so  far  belonged  to  Quebec  and  Nova  Scotia.  Ontario, 
not  to  be  outdone  in  the  end,  bided  her  time.  For  nearly 
forty-one  years  not  a  blast  furnace  had  been  in  operation  in 
Ontario,  and  during  the  long  interval  the  ore  mines  had 
been  idle  most  of  the  time.  Indeed,  so  little  interest  was 
felt  that  men  had  ceased  to  look  for  new  deposits  or  to  op- 
erate old  mines. ^ 

In  the  mean  time  manufacturers  in  Ontario  had  been  de- 
pendent on  outside  supplies  of  pig  iron.  But  in  1893  some 
enterprising  Americans,  endeavoring  to  fix  a  location  for 
smelting-works  in  Ontario,  accepted  Hamilton's  offer  of  a 
free  site,  $40,000  if  the  company  would  expend  $400,000  on 
smelting-works  with  a  capacity  of  150  tons  per  day  before 
December  31,  1894,  and  a  further  bonus  of  $60,000  if  the 
company  would  construct  steel  works  costing  $400,000  by 
December  31,  1896.2  The  Hamilton  Blast  Furnace  Com- 
pany, which  was  immediately  formed,  erected  a  casting 
house  in  1894,  but  the  furnace  shell,  after  it  had  been 
partly  built,  was  blown  down,  and  reconstruction  was  for 
the  time  being  stopp)ed  because  the  Grand  Trunk  Railway 
spur  to  the  works  was  not  yet  completed.'  But  a  progres- 
sive community  like  Hamilton  was  not  to  be  robbed  of  its 
new  venture.  The  time  for  building  the  plant  was  ex- 
tended, and  by  July,  1895,  a  blast  furnace  plant  possessing 
all  modern  improvements  to  secure  the  best  economy  of 
fuel  and  handling  of  materials  was  practically  completed.* 
In  1897  a  steel  plant,  a  spike  factory,  and  puddling  furnaces 
were  added. 

It  had  been  the  intention  of  the  company  to  use  Ontario 
ore  altogether  in  order  to  obtain  the  full  benefit  of  the 
Ontario  and  Dominion  bounties.    But  as  the  lean  ore 


'  Journal  of  the  Iron  and  Sted  Institute,  1897,  no.  ii,  p.  594. 

'  Iron  Age,  vol.  u,  p.  1292. 

'  Canadian  Mining  Revirtv,  vol.  xv.  p.  38. 

*  Monetary  Times,  vol.  xxvi,  p.  610. 


THE  DEVELOPMENT  OF  THE  INDUSTRY     115 

brought  from  North  Hastings  contained  too  much  sulphur 
and  had  to  be  roasted,  a  large  part  of  the  output  ranked  as 
Number  3  iron.'  A  wider  range  of  ores  was  needed  if  the 
company  was  to  produce  a  grad°  '  iron  more  suitable  for 
the  all-round  requirements  o.  ihn  Cai.idiar  trade.*  New 
York  and  other  ores  which  \v  r«  Itled  w«re  uund  to  be  of 
poor  quality,  inasmuch  as  tb-.;  i>rc,d;iced  oo  much  slag. 
Lake  Superior  ore  was,  therefore,  used  ^r  '  though  it  drew 
no  bounty,  the  financial  result  was  satisfactory'.  The  pro- 
ject was  a  success  from  the  first.' 

§  5.  Meanwhile  a  number  of  attempts  to  smelt  iron  ore 
in  Ontario  had  proved  unsuccessful.  In  1881  American  in- 
terests began  to  talk  of  smelting  iron  in  the  Ottawa  VaUey  .* 
The  Canada  Iron  and  Steel  Company  of  Montreal  was  in- 
corporated to  test  an  invention  for  making  wrought  iron 
direct  from  ore  by  a  "blowpipe  process," '  but  after  experi- 
menting for  a  year,  at  a  cost  of  $70,000,  the  Company 
abandoned  the  scheme. 

In  188!2  several  deve'opments  were  considered.  Chicago 
capitalists  began  to  build  a  blast  furnace  at  Furnace  Falls, 
in  the  county  of  Haliburton,  Ontario.  The  situation  offered 
exceptionally  good  timber  limits,  excellent  v/ater  power, 
proximity  to  flux,  and  railway  connections  with  the  mar- 
ket. But  after  an  expenditure  of  $35,000,  the  work  was 
stopped  for  lack  of  capital  to  complete  the  furnaces.' 

In  Nova  Scotia,  Thomas  Burrows,  intending  to  build  a 
furnace  m  Pictou  County,  bought  a  plot  of  ground  at  St. 

I  Monetary  Times,  vol.  xxvi,  p.  1464. 

»  Iron  Age,  vol.  LVll,  p.  1306. 

»  Monetary  Times,  vol.  xxvi.  p.  146. 

«  Debates,  1882.  p.  7««4.  .     .  ,  „  ...       •  » 

'  The  iron  ore  was  ground  fine  and  mixed  with  flux,  and  then  intro 
duccd  into  a  long  cylindrical  blast  furnace.  The  intense  heat  from  burn- 
ing oil  which  was  used  as  fuel  melted  the  ore.  On  rea'-hing  the  puddling 
chamber,  the  iron  gathered  into  balls,  which,  when  ready,  were  taken  out 
and  hammered  into  blooms. 

•  B.-vrtlett,  op.  cit,  pp.  52«-23. 


i.    ts 


•  h..: 


■^^L^i^^^m^^m:-:!  ^     k^:Jt^ 


116    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

Paul's,  and  set  prospectors  and  miners  to  work.  New 
parties  who  entered  the  field  changed  the  course  of  the 
river,  cut  off  the  supply  of  water,  and  ended  the  attempt.* 

In  1883  the  London  Steelworks  Company  of  London, 
Ontario,  built  works  containing  a  thirty-ton  Siemens  melt- 
ing furnace,  and  a  rolling  mill,  to  make  steel  castings  and  a 
patent  car  wheel,  as  well  as  bar  steel,  steel  flats  and  rounds, 
coil  spring,  and  the  best  qualities  of  bar  iron.  In  1884  a 
puddling  furnace  and  steam  hammers  were  put  in  to  make 
steel  by  a  new  process;  but,  like  the  earlier  steel  plant  at 
Quebec,  it  was  ahead  of  the  times.  The  company  failed  and 
the  place  was  closed.^ 

The  Midland  Railway  and  Iron  Company  was  formed  in 
Nova  Scotia  in  1888,  but  after  working  six  months,  it 
stopped  operations  and  nothing  further  was  done.^  In  1889 
American^  proposed  to  erect  blast  furnaces  to  smelt  ores 
found  north  of  Lindsay,  Ontario,  if  the  local  authorities 
would  give  a  Iwunty  and  if  the  Government  would  assist 
the  extension  of  the  Irondale  and  Bancroft  Railway,  but 
nothing  further  was  heard  of  the  sir'-jestion.''  In  the  same 
year  the  Nova  Scotia  Coal,  Iron  and  Railway  Company 
was  formed  to  develo])  the  mines  in  Pictou  County,  Xova 
Scotia.  Analyses  were  laid  before  British  and  American 
capitalists,  but  without  success;  they  were  afraid  to  invest 
in  the  Canadian  iron  industry'.*  In  1892  capitali-sts,  includ- 
ing Charles  Rogers,  Robert  Jaffray,  and  G.  A.  Cox,  were 
organizing  a  company  to  build  a  blast  furnace  at  Toronto. 
But  when  they  could  not  secure  an  alteration  of  the  bounty 
system  to  include  iron  made  from  all  ores,  the  proposal  was 
abandoned.*  In  1895  there  was  talk  of  an  iron  and  steel 
plant  to  manufacture  pig  iron  and  steel  and  finished  ar- 
ticles in  Kingston,  which  was  asked  to  provide  a  site  and 


'  Canadian  Engineer,  vol.  Il,  p.  104. 
'  Canadiiin  Engineer,  vol.  li,  p.  105. 
*  Monetary  Times,  vol.  XXIII,  p.  4C5. 
-  Canadiun  Engincf,  Vui.  II,  p.  iOi. 


'  Bartlett,  op.  oil.,  p.  535. 


*  Iron  Age,  vol.  ii,  p.  lOSO. 


»^jfc:ia 


h.\lA%  'IE- 


THE  DEVELOPMENT  OF  THE  INDUSTRY     117 

a  loan  of  $250,000,  s   mred  by  a  mortgage  on  the  stock, 
plant,  and  prospective  bounties,  but  the  whole  affair  feU 

Thfre  was  to  be  one  more  attempt  to  estabUsh  a  second 
iron  plant  in  Pictou  County,  ^ova  Scotia.  In  1890,  Mr. 
M  E  Siostedt  headed  a  prospecting  company  to  ascertain 
whether  a  charcoal  iron  furnace  could  be  suitably  located 
in  Nova  Scotia.  They  chose  to  make  cuarcoal  iron  because 
of  the  demand  for  car-wheel  manufacture,  at  a  time  of  ex- 
tensive railway  construction.^  In  1891  the  Pictou  Charcoal 
Iron  Company  was  formed  to  acquire  several  deposits  of 
excellent  brown  hematite  on  the  line  of  a  new  branch  rail- 
way from  BridgeviUe  to  the  Intercolonial  Railway.  Large 
tracts  of  timberland  were  also  acquired.    At  last  the  com- 
pany decided  to  build  a  blast  furnace  at  Bridgeville  in  close 
proximity  to  the  ore  and  Umestone  beds.   This  situation 
afforded  the  advantage  of  a  short  haul  of  ore  and  fluxes  to 
the  furnace,  large  tracts  of  hardwood  in  the  immediate 
vicinity  and  along  the  Intercolonial  and  the  Nova  Scotia 
Midland  Railways,  and  the  two  railways  gave  ample  out- 
let for  the  product.  The  foundation  of  a  furnace  was  laid  m 
the  winter  of  1891,  but  unexpected  difficulty  in  securing 
funds  for  the  enterprise  retarded  progress,  and  the  works 
were  not  built  untU  1892,  when  a  second-hand  furnace  and 
machinery  were  mstalled.  and  the  manufacture  of  charcoal 
iron  was  begun.»  The  bounty  on  puddled  bars  resulted  m 
the  addition  of  a  puddling  plant  in  1894.*  In  1895  the  com- 
pany instituted  a  steel  converting  plant  to  turn  the  larger 
part  of  their  material  into  high  quality  agricultural  imple- 
ment steel  for  the  home  market.'  Lack  of  orders  for  char- 
coal pig  iron,  lack  of  capital,  and  dullness  of  trade  ended 
the  active  work  of  the  company  in  1896.  mining  operations 

>  Canadian  Mining  Review,  vol.  xiv,  p.  95. 

s  Ibid.,  vol.  xn.  p.  30.  •  fM..  pp.  «-3. 

*  Canadian  Mining  Manual,  1897,  pt.  Ii,  p.  79. 

«  Canadian  EriQine^,  vol.  m.  p.  «03. 


1    fq 


!i:*mM- 


m!.:L:^im 


118        lE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

alone  being  carried  on  for  a  short  time  to  supply  the  Nova 
Scotia  Steel  Company.' 


!li 


ir 


1  1     ! 


in 


§  6.  Meanwhile,  the  Canadian  rolling  mill  and  finishing 
industry  had  experienced  considerable  development.  In  1880 
the  Morrow  Machine  Screw  Company  of  IngersoU,  and  the 
St.  John  Bolt  and  Nut  Company  of  New  Brunswick,*  were 
formed.  In  1881  F.  D.  Bigelow  built  a  nail  factory,  which 
was  taken  over  by  the  Pillow  and  Hersey  Company  in  1887.' 
In  1883  the  Metropolitan  Rolling  Mills  were  incorporated 
and  a  plant  built  in  Montreal.*  In  the  same  year  the  Mon- 
treal Steelworks  were  opened;  and  shortly  after  the  Do- 
minion Bridge  Company  and  the  Dominion  Wire  Rope 
Company  were  incorpc  rated.* 

The  Coldbrook  RoUing  Mills  of  St.  John,  New  Bruns- 
wick, which  had  not  been  in  operation  for  some  years,  were 
bought  in  1884  by  Messrs.  Burpee  and  put  in  operation.' 
In  1885  the  Hahfax  RoUir  j  Mill  Company  built  in  Halifax,^ 
and  Messrs.  J,  and  W.  Chesley  built  a  rolling  mill  in  St. 
John.  In  1888,  the  Montreal  Rolling  Mills  added  bar  and 
plate  mills  to  the  plant  as  well  as  a  wrought-iron  pipe  plant. 
The  Canadian  Pacific  Railway  was  making  all  its  own  loco- 
motives; a  screw,  carriage  bolt,  and  nail  factory  was  built, 
and  a  pipe  foundry  and  bridge  works  were  built  at  Hamil- 
ton; *  the  Montreal  Car  Wheel  Company  was  incorporated 
by  the  Drummond  interests;'  and  the  Ontario  Rolling 
Mills  Company  built  a  new  plant  at  Swansea.'"  In  1889  the 
Montreal  Steel  works  were  incorporated  by  K.  W.  Black- 
well  and  J.  R.  Wilson  as  the  Canada  Switch  Manufactur- 
ing Company."  The  Portland  RoUing  Mills  added  to  their 

*  Canadian  Mining  Review,  vol.  xv,  p.  219. 
'  Canadian  Mining  Manual.  1895,  p.  276. 

•  Ibid.,  p.  253.  *  Ibid.,  1893,  p.  251. 

»  Ihid.,  1895,  p.  258.  «  Bartlett.  op.  cii.,  p.  530. 

'  Ibid.,  p.  542.  «  Debates,  1888.  p.  1036. , 

'  Canadian  Mining  Manual,  1895,  p.  274. 
"  Ibid.,  p.  i6i.  u  ii^_^  p.  )475. 


^r::i> .  #"m 


I 


THE  DEVELOPMENT  OF  THE  INDUSTRY     119 

plant  a  puddling  furnace,  five  heating  furnaces,  three  trains 
of  rolls,  two  spike  machines,  and  a  fifteen-ton  hammer.* 
The  Ontario  Lead  and  Barb  Wire  Company  bought  the 
plant  of  the  Hamilton  Steel  Wire  Nail  Company  and  re- 
moved it  to  Toronto,  where  an  extended  plant  was  con- 
structed.'^  The  Belleville  Rollmg  Mills  Company  was 
formed  to  roll,  manufacture,  and  sell  iron  and  steel  and 
their  products.*  In  1890  the  Drummond-McCall  Pipe 
Foundry  was  incorporated,*  and  the  Caledonia  Ironworks 
for  manufacturing  engines  and  boilers  was  put  on  its  feet  by 
J.  McDougall  &  Company  at  Montreal.' 

In  1893  J.  Rhodes  Curry  &  Company  bought  the  car- 
wheel  foundry  and  machine  shop  of  J.  Harris  &  Company, 
St.  John,  and  turned  out  the  first  Canadian  cars  at  Amherst, 
Nova  Scotia.'  The  McDonell  Rolling  Mills  Company  built 
works  at  Sunnyside.^  In  1894  the  Ontario  Rolling  Mills 
Company,  encouraged  by  the  increased  duty  on  scrap  iron, 
put  in  a  four-ton  puddling  furnace.*  In  the  same  year  the 
Gananoque  Nut  Factory  was  put  in  operation.^  The  chief 
products  of  these  rolling  mills  were  merchant  and  other  bar 
»  iron,  nail  plate,  mine  rails,  ship  and  railway  spikes,  bridge 
bolts,  car  axles,  fishplates  and  knees  for  ships,  cut  nails, 
horseshoes,  horseshoe  nails,  bolts  and  nuts,  band  iron,  stee) 
forgings,  rivets,  and  washers,  i"  This  histoiy  of  the  finishint; 
industries  does  not  cover  the  full  number  as  a  considera- 
tion of  the  census  figures  for  1881  and  1891  will  show."  In 

*  Canadian  Mining  Manual,  1895,  p.  275. 

«  Monetary  Times,  vol.  xxra,  p.  248.  '  Und..  p.  778. 

*  Canadian  Mining  Review,  vol.  x,  pp.  45-46. 

•  Canadian  Engineer,  vol.  n,  p.  80. 

•  Iron  Age,  vol.  ui,  1893.  p.  27. 

'  Canadian  Mining  Manual,  1895,  p.  251. 

*  Iron  Age,  vol.  lvi,  p.  25. 

•  Debates,  1894,  p.  2537.  '"  Iron  Age,  vol.  uii,  p.  460. 

"  See  Appendix  C,  Table  I.  As  the  Bgures  for  1901  cover  cstablish- 
ments  employing  five  employees  or  more,  and  as  there  was  probably  '  ittle 
advance  between  1891  and  1897  owing  to  the  industrial  depression,  the 
figures  (or  1901  are  of  little  value.  The  figures  for  1881  and  1891  give 
(uiriy  satisfactory  indicatiua  of  the  growth  dowE  to  1897. 


Bji 


120    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 


:ir 


If! 

fil 


ll 


I 


1881  there  were  twenty-six,  and  in  1891,  twenty-nine  es- 
tu})lishnients  producing;  a  restricted  number  of  iron  and 
steel  products,  chiefly  rolling-mill  products,  nuts,  bolts, 
nails,  hinges,  and  kindred  articles.  Between  1881  and  1891 
six  bridge-building  plants  were  established,  and  the  number 
of  wire  and  wire-fencing  plants  was  increased  from  seven 
to  fifty.  Railway  supplies  received  the  attention  of  three 
plants  '"n  1891,  as  compared  with  a  single  plant  in  1881. 
The  fip,ures  showing  the  values  of  the  products  give  even 
more  adequate  evidence  of  the  advance  in  the  production 
of  finished  iron  and  steel  products.  It  was  generally  felt  in 
1893  and  1894  that  the  capacity  of  existing  Canadian  mills 
was  more  than  ample  to  supply  the  domestic  demand 
for  most  rolling-mill  products.'  Competition,  in  fact,  was 
so  severe  that  amalgamation  and  combination  became  nec- 
essary. 

§  7.  It  is  evident  that,  during  the  period  1874  to  1897, 
forces  were  working  to  develop  an  iron  and  steel  industry. 
By  1897  the  primary  industry  had  begun  to  assume  a  prom- 
ising importance.  Success  had  attended  the  operations  at 
Radnor  and  at  Drummondville,  Quebec.  The  annual  out- 
put had  advanced  from  an  average  of  about  25,000  tons 
fc  the  early  eighties  to  an  average  of  45,294  tons  for  the 
years  1893  to  1897.  The  production  of  both  pig  iron  and 
steel  had  begun  at  New  Glasgow  and  Trenton  in  Nova 
Scotia,  with  very  satisfactory  results,  and  at  Hamilton, 
Ontario,  a  beginning  had  been  made  in  the  development  of 
what  has  since  become  an  important  iron  and  steel  indus- 
try. Furnaces  existed  also  at  Londonderry,  and  at  Bridge- 
ville.  Nova  Scotia,  although  the  results  of  their  operations 
were  not  at  all  encouraging.  The  rolling-mill  and  finishing 
industry  was  so  widely  developed  in  Ontario,  Quebec,  and 
the  Maritime  Provinces,  that  a  redundant  supply  of  certain 
kinds  of  plants  seems  actually  to  have  existed. 
^  Iron  Aye,  vi>\.  mi,  p.  460. 


THE  DEVELOPMENT  OF  THE  INDUSTRY     121 

This  development  of  the  Canadian  iron  and  steel  indus- 
try demands  some  exphmation,  and  explanations  are  not 
difficult  to  find.    At  Radnor  and  at  Drummondville,  the 
character  of  the  ore  and  the  consequent  quality  of  the  iron 
assured  a  ready  market  for  the  product.   Wlxen  this  iron 
could  find  a  market  in  England  and  the  United  States  the 
conditions  of  productioi-  must  have  been  very  favorable. 
Likewise,  the  developments  at  New  Glasgow  and  Trenton 
were  favored  by  the  discovery  and  use  of  the  Newfound- 
land ores  as  early  as  1894.   It  is  doubtful  whether  the  pro- 
duction of  pig  iron  at  Trenton  would  have  succeeded  had 
it  not  been  for  the  Newfoundland  ores,  since  the  Pictou 
ores  were  soon  found  to  be  unsatisfactory  and  their  supply 
was  limited.    Developments  at  Hamilton,  Ontario,  were 
similar.    While  the  company  originally  intended  to  use 
Ontario  ores  in  order  to  benefit  by  the  Ontario  bounty 
system,  it  was  found  necessary  to  use  Lake  Superior  ores 
which  could  be  laid  down  at  Hamilton  almost  as  cheaply  as 
at  American  furnaces.  On  the  other  hand,  the  depletion  of 
ore  deposits  at  St.  Maurice,  and  the  hardness  of  the  ores  at 
Londonderry,  were  conditions  that  ended  the  operations  of 
the  St.  Maurice  Forges  and  made  the  production  of  pig 
iron  at  Londonderry  barely  profit<\ble.  Thus  we  see  that  in 
this  period  of  the  history  of  the  industry,  the  supplies  of 
ore  were  at  some  points  more  favorable  than  they  had 

been. 

The  fuel  supply  was  also  a  matter  of  importance.  Fuel 
could  be  la.d  down  at  Hamilton  almost  as  cheaply  as  at 
American  Lake  ports,  and  at  New  Glasgow  there  was  a 
fairly  satisfactory  supply  of  good  coking  coal.  Charcoal 
was  abundant  at  Radnor  after  depots  were  arranged  for 
the  accumulation  of  both  ore  and  charcoal.  At  Drum- 
mondville there  was  plenty  of  good  wood  for  charcoal. 
Elsewhere  conditions  were  not  so  favorable.  The  London- 
derry firm  had  to  shut  down  on  one  occasion  when  the  only 
coke  plant  in  Nova  Scotia  failed  to  send  a  suppiy.  Finally, 


■ii 


;&■ 


Ml- 


M 


rl 


|li 


122    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

it  had  to  build  its  own  coke  ovens.  The  end  of  operations 
at  St.  Maurice  was  also  hastened  by  the  lack  of  an  adequate 
supply  of  charcoal. 

Meanwhile,  too,  the  market  for  pig  iron  and  steel  billets 
had  grown.    The  Canadian  consumption  of  pig  iron  ad- 
vanced, from  an  average  of  75,000  tons  for  the  years  1880 
to  1885,  to  an  average  annual  consumption  of  106,555  tons 
for  the  years  1890  to  1895. i   This  was  not  so  large  as  it 
might  have  been  had  the  rolling  mills  not  made  consider- 
able use  of  scrap  iron  in  the  production  of  bars  and  finished 
products.  The  consumption  of  much  pig  iron  at  Hamilton 
and  within  a  radius  of  one  hundred  miles  suggested  the 
initial  attempts  of  the  Hamilton  Blast  Furnace  Company. 
The  company  also  used  a  great  deal  of  iron  in  its  own  mills. 
While  the  ordinary  product  of  the  Pictou  Charcoal  Iron 
Furnace  failed  to  secure  a  favorable  reception,  the  special 
quality  of  charcoal  iron  produced  at  Radnor  and  at  Drum- 
mond\ille  was  always  in  demand  for  the  manufacture  of 
car  wheels  in  this  period  of  lapid  railway  expansion.   Not 
only  was  the  integration  of  the  different  branches  of  the 
New  Glasgow  industries  a  source  of  special  strength,  by 
making  them  almost  self-sufficing,  but  their  highly  finished 
products  found  a  ready  market.   The  Londonderry  plant 
found  advantjige  in  extending  its  finishing  industries  to  in- 
sure an  outlet  for  its  primary  products  which  did  not  ha'  . 
as  good  an  open  market.    The  integration  of  the  various 
plants  of  the  McDougalls  and  the  Drummonds,  of  Mon- 
treal, rendered  these  enterprises  more  complete  than  they 
would  otherwise  have  been,  and  put  them  on  a  better  plane 
of  competition.  While  one  branch  of  the  industry  supplied 
pig  iron,  another  finished  the  raw  material  into  articles 
ready  for  an  extensive  and  growing  market. 

By  1877  steel  had  begun  to  take  the  place  of  puddled 
bars  in  the  manufacture  of  finished  products.    The  total 
world  product  advanced  from  569,618  tons  in  7877  to 
1  See  Appendix  B.  Tabis  I. 


!A;iJ|B.g'  Oismmm 


THE  DEV-ELOPMENT  OF  THE  INDUSTRY     123 


7,155,957  tons  in  1897.»  Unquestionably,  this  had  much  to 
do  with  the  construction  of  steel  mills,  and  the  practical 
bandonment  of  pnddling  furnaces. 
The  supply  or  lack  of  capital  often  spelled  success  or  fail- 
ure in  the  Canadian  iron  and  steel  industry.  At  this  time 
more  domestic  capital  had  been  accumulated  and  was  avail- 
able for  investment.  Probably  the  development  of  the  cor- 
porate form  of  business  organization  was  also  significant. 
At  all  events,  one  of  the  mo^t  i.oticeable  facts  was  that 
plants  previously  owned  and  operated  by  partnerships 
were  in  the  later  eighties  taken  over  by  joint-stock  com- 
panies, and  whenever  new  Unes  of  development  at  New 
Glasgow  were  entered  upon,  a  new  company  was  formed, 
even  though  the  interests  were  usually  so  nearly  identical 
that  an  amalgamation  was  formed  as  soon  as  the  new  en- 
terprise had  proved  its  worth.  In  many  cases  new  capital 
was  subscribed  and  extensions  were  made  to  the  plant 
whenever  incorporation  was  effected.    Fresh  ventures  al- 
most always  made  use  of  the  corporate  form  of  organi- 
zation. 

As  we  have  seen,  the  most  rapid  growth  of  the  industry 
was  reaUzed  in  the  finishing  stages.  This  can  be  at  least 
partially  explained  by  the  increase  of  railway  mileage 
from  6858  miles  in  1879,  to  10,773  miles  in  1885,  and  to 
16,550  miles  in  1897.^  The  f  'ility  with  which  corporations 
could  be  formed  doubtless  aided  the  growth  of  the  finishing 
industry.  The  most  significant  fact,  however,  seems  to  be 
that  this  branch  of  the  industry  could  be  conducted  on  a 
relatively  small  scale,  in  small  local  factories,  to  supply  a 
local  market  with  commodities  on  which  transportation 
charges  might  be  high.  A  small  building  could  be  turned 
into  a  nail  factory,  or  rolling-mill  proprietors  could  add  a 
department  for  the  production  of  horseshoes  or  tacks.  It  is 
for  this  reason  largely  that  a  considerable  addition  to  the 

>  W.  Harper.  Charts  of  the  Commerce  of  the  World,  p.  83. 
'  See  Appendix  A- 


I 


I  I 


124    THE  CANADLVN  IRON  AND  STEEL  INDl  STRY 


■  i  I 


'  i: 


number  of  rolling  mills  may  be  noted  for  the  years  of  pros- 
perity 1880  to  1883  and  1887  to  1890. 

§  8.  It  is  more  difficult  to  determine  the  exact  effect  of 
the  tariff  and  l)ounty  system  on  the  development  of  the 
iron  and  steel  industry,  during  this  period,  than  it  was  to 
determine  the  value  of  protection  in  the  previous  f>eriod. 
Discussion,  of  which  there  was  much  more  than  during  the 
earlier  period,  shows  that  opinion  as  to  the  effects  of  pro- 
tection varied.  Yet  most  of  those  who  favored  protection 
were  usually  content  with  proving  that  the  industry  had 
grown  up  during  a  period  of  high  duties.  As  we  have  seen, 
such  an  argument  is  not  conclusive.  Those  who  wanted  pro- 
tection should  have  been  able  to  prove  the  connection  be- 
tween protection  and  the  development  of  the  mdustry  and 
should  have  been  able  to  show  that  the  benefits  did  not  ex- 
ceed the  burden  of  the  protective  policy. 

Evidence  of  the  stu  "  :s  afforded  by  protection  appears, 
however,  in  several  ca^v-s.  The  Annapolis  Iron  Company 
put  its  furnaces  in  operation  at  Londonderry,  following  the 
granting  of  bounties  on  puddled  bars  and  the  increase  of 
the  duties  on  scrap  iron.  The  Hamilton  Blast  Furnace 
Comi)»ny  was,  no  doubt,  encouraged  by  the  generosity  of 
Hamilton  and  by  the  bounty  law  and  the  scrap  iron  duty 
o'  1894.  Protection  seems  to  have  been  most  effective  in 
developing  the  finishing  industry.  In  fact,  the  protection 
afforded  was  so  high  that  the  production  of  some  lines  was 
overstimulated  to  an  extent  necessitating  the  formation  of 
combines  to  maintain  prices  behind  the  tariff  wall.  The 
growth  of  the  finishing  industry  was  partly  due  to  causes 
other  than  protection.  \et  protection,  by  increasing  prices, 
encouraged  the  erection  of  small  plants.  At  the  same  time 
the  fact  that  pig  iron  and  especially  scrap  iron  could  be 
secured  cheaply  within  the  country  or  could  be  imported  at 
low  prices  favored  the  growth  of  the  rolling-mill  industry 
by  providing  cheap  raw  materials. 


THE  DEVELOPMENT  OF  THE  INDUSTRY  1^25 


In  most  cases,  however,  protection  had  little  to  do  with 
the  development  of  the  primary  industry.  The  St.  Maurice 
Forf^es  failed  in  1883,  the  year  that  bounties  were  granted 
the  "struggling  industry."  The  Steel  '  nnp.any  of  Canada 
was  in  liquidation  soon  after  the  first  increase  in  protection. 
Likewise  the  l)ounties  on  puddled  bars  and  the  duty  on 
scrap  iron  entirely  failed  to  support  the  Pictou  Charcoal 
Iron  Company.  The  Hamilton  Blast  Furnace  Company 
succeed  :;tl  without  the  use  of  the  Iwunties  it  had  expected 
on  the  })roduction  of  iron  from  Ontario  ores.  The  produc- 
tion of  steel  began  in  1882,  long  before  boimties  were 
given,  and  was  continued  with  success  despite  the  fact  that 
the  duty  of  $3  per  ton,  provided  for  in  1879,  was  abolished 
in  1881.  New  pig-iron  furnaces  were  built  at  Radnor  and 
at  New  Glasgow  five  years  after  the  revi.sion  of  1887  and 
before  the  scrap-iron  duty  was  raised  in  1894.  The  Drum- 
mondville  furnaces  were  built  in  1880  and  1881  before 
bounties  were  added  to  the  duty  of  $2  per  ton.  As  there 
was  a  foreign  market  for  the  product  of  the  car-wheel 
plant,  these  furnaces  would  have  been  built  whether  or  not 
protection  had  increased  in  1879.  In  short,  i)ractically  all 
the  successful  pig-iron  and  steel  plants  were  started  be- 
cause of  fundamental  technical  conditions  that  favored 
their  development  rather  than  because  of  the  application 
of  the  national  policy  of  protection  to  the  iron  and  steel 
industry 

Having  determined  the  part  played  by  protection  in  the 
development,  we  may  turn  our  attention  to  the  wisdom  of 
the  policy.  In  the  first  place,  neither  the  duties  uor  boun- 
ties were  responsible  for  any  great  part  of  the  growth  of 
tlie  primary  industry.  In  the  mean  time  the  duties  on  pig 
iron  must  have  cost  consumers  about  JS3,000,000  on  a  total 
consumption  of  1,500,000  tons.  Of  this,  the  home  produc- 
ers must  have  received  about  $1,000,000,  enough  to  build 
a  very  respectable  blast  furnace  capable  of  producing  the 
total  amount  of  pig  iron  imported.    Thij  $1,000,000,  plus 


120    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 


^ 


i  1  ■ 


the  additional  $3,(M)0,000  paid  by  consumers,  and  over 
$600,000  paid  as  lK)imties,  could  have  lieen  used  in  a  more 
remunerative  way,  possibly  by  the  overnment  itself,  in 
building  its  own  furnaces  and  mills  for  the  production  of 
iron  for  Rovcrninout  railways  and  other  government  works. 
The  protection  of  the  primary  industry  was,  therefore,  a 
mistake. 

It  seems  strange  that  the  duties  on  pig  iron  and  scrap 
iron  were  not  entirely  abolished  in  favor  of  bounties  on  pig 
iron  alone.  The  payment  of  bounties  of  $4  per  ton  would 
have  cost  the  Government  only  $1,200,000,  and  would 
have  coEt  consimiers  practically  nothing.  However,  politi- 
cal parties,  like  electorates,  have  the  liberty  of  making 
errors  in  judgment:  it  is  easier  to  see  a  mistake  thirty 
years  later  with  the  figures  before  us  than  to  foresee  and 
avoid  it.  But  by  1893  the  Liberal  Party  saw  the  force  of 
this  argument  in  tariff  iK)licy,  and  shaijed  its  political  plat- 
form accordingly. 

At  the  same  time  a  good  deal  can  be  said  for  the  applica- 
tion of  protection  to  the  finishing  industry.  As  we  have 
seen,  protection  undoubtedly  had  a  stimulating  effect. 
Whether  the  cost  was  too  great  or  not  is  diflBcult  to  deter- 
mine. Certainly  large  volumes  of  iron  and  steel  goods 
were  imported  under  the  duties.  In  the  case  of  some  prod- 
ucts competition  became  so  severe  that  prices  fell,  and  for 
the  time  being  the  duties  were  not  so  great  a  burden  on  con- 
sumers as  they  might  have  been.  Once  the  industry  was 
developed,  protection  should  have  practically  been  alx)l- 
ished;  the  revision  of  1894  did  effect  some  slight  reduction 
on  finished  iron  goods.  The  growth  of  the  finishing  industry 
would  have  warranted  more  extensive  reductions  than  were 
made  at  that  time.  M.iny  manufacturers  and  others  using 
iron  and  steel  goods  were  '  *"  this  opinion,  and  accord- 
ingly gave  their  approval  to  '  le  policy  of  "tariff  for  rev- 
enue only  "  launched  by  the  Liberals  at  the  Ottawa  Con- 
vention of  1S93. 


THE  DEVELOPMENT  OF  THE  INDUSTRY  1«7 

5  0.  In  conclusion,  it  may  be  said  that,  while  there  vas 
some  advance  in  the  Canadian  iron  and  steel  industry  i)e- 
tween  1879  and  1897,  the  industry  was  not  a  large  one.  As 
protection  apparently  was  not  an  iinjwrtant  fju;tor  in  the 
development  of  the  primary  industry,  the  burdens  of  pro- 
tection lead  us  to  Inilieve  that  it  was  a  nustakc.  Protection 
did  have  a  considerable  influence  in  developing  the  i)roduc- 
tion  of  finished  i)roducts,  but  it  was  not  reduced  as  rapidly 
as  it  should  have  l)een,  and  injustices  and  inequalities  in 
the  customs  tariff  led  to  much  criticism  and  opposition.  So 
when  the  Conservative  Party  lost  p)owcr  in  1896,  Canada 
entered  on  a  new  period  of  commercial  policy  and  of  eco- 
nomic history  which  will  be  the  subject  for  discussion  in 
Part  Four  of  this  study. 


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PART  FOUR 

THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

1897-1914 


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CHAPTER  VII 

THE   GENERAL   HISTORY   OF   THE   TARIFF  AND 
BOUNTY   SYSTEM 

§  1.  Nine  years  after  the  advance  in  customs  duties  in 
1887,  the  protective  policy  was  again  the  subject  of  sharp 
controversy,  and  the  political  situation  was  acute.  The 
Liberal  programme,  of  "tariff  for  revenue  only,"  included 
not  only  a  reduction  of  duties  on  iron  and  steel,  but  also 
the  abolition  of  the  bounty  system.  At  the  same  time 
much  dissatisfaction  with  and  criticism  of  the  Conserva- 
tive Government  was  abroad.  The  period  from  1893  t^ 
1897  was  one  of  severe  industrial  depression  and  of  gen- 
eral discontent.  The  country  sought  relief  at  the  hands  of 
a  new  Government,  and  in  1896,  placed  the  control  in  the 
hands  of  the  Liberal  Party. 

By  far  the  most  difficult  task  for  the  revisers  of  the 
*^riff  in  1897  was  the  alteration  of  the  schedule  compris- 
ing iron  and  steel  and  the  leading  intermediate  and  finished 
products.  It  is  always  difficult  to  frame  an  L-on  and  steel 
schedule  that  will  suit  all  parties  for  any  lenfjth  of  time; 
even  wi'  'nn  the  industry,  dissension  is  sure  to  arise.  Prob- 
abb  ^r  schedule  of  Canadian  duties  has  given  occa- 

sion •  much  discussion  among  manufacturers  or  so 

mu(  I  oulty  in  politics. 

The  larmers  especially  expected  to  have  a  great  biu*den 
lifted  from  their  shoulders.  They  expected  to  get  many 
iron  and  steel  ai  tides  at  prices  materiauy  lower  as  a  result 
of  the  reduction  of  the  duties  which  had  protected  the  suc- 
cessive stages  of  manufacture.  On  the  other  hand,  the  pro- 
ducers of  pig  iron,  steel  billets,  and  puddled  bars  wanted 
high  protective  duties  continued  along  with  the  bounties. 


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132    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

While  the  foundrymen  were  not  quite  so  united,  most  of 
them  favored  a  reduction  of  duties  on  their  raw  materials. 
Manufacturers  who  used  castings  as  raw  material  were 
quite  decided  in  their  demand  that  there  should  be  a  re- 
duction of  protection  to  producers  of  castings.  The  manu- 
facturers of  bar  iron,  who  were  complaining  of  the  duty  on 
pig  iron,  puddled  bars,  and  on  wTought  scrap  iron,  were 
specially  grieved  by  the  advance  of  duties  on  scrap  iron 
in  1894,   Likewise,  the  manufacturers  who  used  bar  iron 
and  steel  in  the  production  of  finished  articles  objected  to 
the  high  duties  on  their  raw  materials.   Each  stage  of  the 
industry  was  quite  willing  to  accept  protection  for  itself, 
insisting  at  the  same  time  on  cheap  raw  materials  for  the 
production  of  its  own  output.  It  is  probable  that  the  gen- 
eral dissatisfaction  on  the  question  of  iron  and  steel  duties 
secured  for  the  Liberals  the  support  not  only  of  the  farm- 
ing element,  but  in  even  greater  degree  of  the  great  body 
of  manufacturers  themselves,  to  whom  the  prospect  of  de- 
creased duties  on  articles  which  formed  their  raw  mate- 
rials appealed  as  an  obvious  desideratum,  and  contributed 
more  than  any  other  factor  to  the  defeat  of  the  Conserva- 
tives in  1896. 

§  2.  So  far  as  the  iron  and  steel  duties  were  concerned, 
the  tariff  of  1897  provided  a  general  reduction.'  On  pig 
iron,  kentledge,  and  cast  scrap  iron,  a  reduction  of  $1.50 
was  made  and  the  duty  placed  at  $2.50  per  ton.  The  duty 
on  iron  and  steel  ingots,  cogged  ingots,  blooms,  slabs,  bil- 
lets, puddled  bars,  loops,  etc.,  n.o.p.  (not  otherwise  pro- 
vided for),  was  reduced  from  $5  to  $2  per  ton.  Iron  and 
steel  scrap  were  admitted  at  $1.50  instead  of  $3  per  ton; 
the  duties  on  steel  bars,  bands,  plates,  and  steel  angles 
were  reduced  from  $10  to  $7;  on  steel  fish-  and  tie-plates 
from  $10  to  $8;  and  the  duties  on  steel  shaftings  and  forg- 
ings  were  placed  at  30  per  cent,  with  a  minimum  of  $10 

•  See  Appcmiix  F. 


^^^W^^^^^^TT^^^E^ 


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HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    ISS 

per  ton,  instead  of  35  per  cent,  with  a  minimum  of  $15  per 
ton.  On  plates  not  less  than  one  quarter  of  an  inch  thick, 
tubing  for  boilers,  angle  ties,  beams,  etc.,  over  35  poimds 
per  lineal  yard,  the  reduction  was  2i  per  cent.  The  duty 
of  30  per  cent  on  iron  and  steel  bars  and  rails  was  reduced 
by  applying  it  to  all  rails  weighing  as  much  as  45  pounds, 
instead  of  35  pounds  per  yard.  The  duty  on  bituminous 
coal  was  reduced  from  60  cents  to  20  cents  per  ton  on  slack 
coal,  and  to  53  cents  on  "run-of-mine"  coal.  Iron  and 
steel  for  certain  uses  —  for  instance,  iron  and  steel  raasts, 
beams  for  composite  ships,  iron  and  steel  products  whick 
at  the  time  of  importation  were  of  a  kind  not  made  in 
Canada  and  were  imported  for  use  on  ships;  steel  rails 
weighing  not  IfiS  than  45  pounds  per  yard  for  use  on  pub- 
lic railways,  but  not  including  electric  railways  or  tram- 
ways —  were  entered  free.  Many  other  forms  of  iron  and 
steel  of  special  grades,  sizes,  and  characteristics  were  en- 
tered free  when  used  for  special  purposes.  Wire  rods  were 
also  admitted  free  of  duty.^  On  the  primary  products  in 
general,  the  reduction  varied  from  35  to  75  per  cent  of  the 
previous  duty;  on  the  more  finished  products  it  averaged 
about  2^  per  cent,  or  about  12  to  20  per  cent  of  the  previous 
duty.  This  rev-ision  of  1897  was  framed  on  the  principle  of 
making  as  many  concessions  as  possible  to  every  one.  For 
instance,  smce  puddled  bars  were  not  extensively  pro- 
duced, the  duty  was  reduced.*  The  duty  on  bridge  plates 
was  reduced  on  the  general  principle  of  making  iron  and 
steel  products,  especially  raw  materials,  cheaper.*  Barbed 
wire  and  galvanized  fencing  were  placed  on  the  free  list 
January  1, 1897,*  as  a  concession  to  the  farmers.  The  labor 
unions  were  pacified  by  the  prohibition  of  the  importation 
of  the  products  of  convict  labor,  and  by  provisions  for 
detailed  inspection  to  prevent  the  importation  of  such  con- 


»  60-81  Vic,  1897,  chap.  16. 

»  Ibid.,  p.  35»«. 

*  60-61  Vic,  1S97,  «^h!vp.  16,  ssi-.  262. 


DebaUs,  1897,  p.  3637. 


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134    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

vict-made  goods.'  Reductions  on  primary  produc*  <  of 
course,  pleased  the  manufacturers  of  finished  produ-ls 
The  free  entry  of  raw  materials  for  manufacture  is  nn^ 
doubtedly  a  corollary  of  a  "national  policy,"  a  splendid 
arrangement  for  the  manufacturers,  in  so  far  as  they  use 
such  raw  materials,  and  probably  a  benefit  to  the  country 
as  a  whole,  to  the  extent  by  which  the  prices  on  finished 
products  may  be  thus  reduced. 

§  3.  This  arrangement  of  concessions  to  all  cannot  be 
fully  understood  without  a  consideration  of  the  bounty 
policy  involved  in  the  revision  of  1897,  and  continued  by 
the  bounty  a<:ts  of  1897  and  1899.  As  there  were  only  four 
mjn  and  steel  plants  on  the  bounty  list  in  1897,  the  Liberal 
Government  probably  could  have  ended  the  bounty  sys- 
tem without  a  great  dislocation  of  industiy^  by  simply 
leaving  it  to  expire.    But  territorial  elements  in  politics 
especially  the  interests  of  the  Maritime  Provinces,  as  well 
as  internal  difficulties  with  the  schedule  previously  consid- 
,  ered,  forced  the  retention  of  the  bounty  system.  When  the 
i  general  duties  on  iron  and  steel  were  reduced  by  the  first 
Fielding  Budget,  the  bounties  were   retained  and  their 
iscope  extended  to  make  amends  for  this  reduction  and  to 
equalize  conditions  for  the  iron  and  steel  manufacturers » 
In  so  doing  the  scope  of  the  bounty  system  was  enor- 
mously  enlarged.^  On  pig  iron  the  bomity  was  increased 
from  $2  to  $3  per  ton  when  made  from  native  ore,  and  a 
bounty  of  $2  per  ton  was  given  on  iron  made  from  im- 
ported  ore.  The  bounty  on  p  :ddled  bars  and  on  steel  bil- 
lets and  ingots  was  raised  from  $2  to  $3.   Whereas  up  to 
this  time  only  pig  iron,  steel  billets,  and  puddled  bars  had 
received  bounties,  under  the  law  of  1897  bounties  becam*. 
payable  on  steel  ingots  also,  when  manufactured  in  Can- 

»  Debates,  1897,  pp.  3661-62. 

»  E.  Porritt.  Iron  and  Steel  Bounties  in  Canada,  pp.  201-02 

'  Debates.  1807.  p.  5180.  *  ^  .\rp^!LD 


mSTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    135 

ada  from  comp>onents  of  which  not  less  than  50  per  cent 
weight  consisted  of  pig  iron  made  in  Canada.'  All  boun- 
ties were  to  be  payable  on  all  iron  and  steel  made  in  Can- 
ada between  April  23,  1897,  r-nd  April  23,  1902.'' 

Besides  extending  the  pay  ncnt  of  bounties  for  a  period 
of  five  years,  advancing  the  rate  of  bounty,  and  extending 
the  system  to  steel  as  well  as  iron,  the  scope  of  the  bounty 
system  was  considerably  enlarged  by  the  inclusion  of  iron 
and  steel  produced  in  Canada  from  foreign  ore.  Bounties 
on  such  products  were  made  payable  in  proportion  to  the 
kinds  of  ore  used.  It  may  be  explained  that  in  1896  the 
newly  discovered  bed  of  ore  at  Bell  Island,  Newfoundland, 
was  under  the  control  of  the  Nova  Scotia  Steel  Company,' 
and  the  Hamilton  Furnace  was  beginning  to  use  American 
in  preference  to  Canadian  ore.  The  claim  that  the  clause 
giving  a  bounty  on  iron  produced  from  foreign  ore  was 
framed  in  the  interests  of  these  companies  is  justified. 
When  some  argued  that  bounties  should  be  given  on  iron 
made  from  native  ores  only,*  it  was  pointed  out  in  reply 
that  the  duty  on  iron  had  been  reduced  and  that  this  ar- 
rangement simply  balanced  the  reduction.  Of  course,  the 
Canadian  Government  maintained  that  it  objected  to  the 
subsidizing  of  American  ore,  but  it  believed  there  were 
reasons  for  stimulating  the  development  of  the  sister  col- 
ony of  Newfoundland.''  Indeed,  it  even  hoped  to  draw 
Newfoundland  into  the  union.'  Mr.  Fielding,  the  Finance 
Minister,  further  argued  that  a  bounty  on  iron  produced 
from  foreign  ore  would  create  a  market  for  native  ore,^ 
since  it  was  impossible  to  smelt  Canadian  ores  without 
adding  some  foreign  ores.  Mr.  Fielding  believed  that  the 
difference  in  the  bounties  on  iron  produced  from  foreign 
ore  and  iron  produced  from  native  ore  was  sufficient  to 

•  OO-fil  Vic,  1897,  chap.  6.  «  60-61  Vic,  1897.  chap.  11. 

•  E.  Porritt,  Iron  and  Steel  Bounties  in  Canada,  pp.  204-05. 

•  Debates,  July,  1899,  p.  7637.  •  MeGrath,  op  cit..  p.  384. 
^  Debates,  181KI,  p.  70*1.  '  Ibxd.,  p.  7643. 


?^BP 


LU    VJKJ    1 


i1«^ 


136    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

stimulate  Canadian  mining,  even  though  the  United  St  ,tes 
mines  were  rather  well  developed.  But  some  feand . '  though 
without  much  cause,  that  American  ore  alone  would  be 
used.2  At  all  events,  though  foreign  ore  probably  would 
have  been  used  even  v^^thout  the  bounties,  the  clause  per- 
mitted the  Canadian  manufacturer  to  use  foreign  ore 
freely.  This  was  a  valuable  concession  to  the  producers  in- 
asmuch as  the  Nova  Scotia  companies  were  already  using 
Neu-foundland  ore,  and  the  Hamilton  Furnace.  Lake 
Superior  ores.'  Mr.  Fielding,  however,  was  opposed  to 
admitting  even  Newfoundland  ore  to  the  full  bounty  lest 
this  should  involve  too  high  a  charge  on  the  Treasury  * 

The  Fieldmg  Bill,  as  first  presented,  provided  that  boun- 
ties  should  be  paid  only  on  iron  and  steel  used  in  Canada 
In  the  event  of  shipment  outside  of  Canada,  the  Governor- 
General  was  to  be  empowered  to  impose  an  export  duty 
equal  to  the  sum  paid  in  bounties  on  such  shipments.*  This 
resolution  was  supported  on  the  ground  that  otherwise  the 
bounty  system  would  attack  foreign  iron  and  steel  indus- 
tries, and,  at  the  same  time,  would  involve  the  taxation 
of  the  home  consumer  for  the  benefit  of  foreign  consumers- 
ill  short.  It  would  attaek  foreign  production  and  subsidize 
foreign  consumption."    Mr.  Fielding  claimed,  with  some 
foresight,  that  the  United  States  and  Great  Britain  would 
object  and  that  the  hostility  of  other  countries  might  be 
aroused.'' 

It  has  been  charged  that  Mr.  Fielding's  clause  was  in- 
serted in  favor  of  domestic  manufacturers  of  finished 
products,  who  wished,  if  possible,  tc  benefit  from  the  boun- 
ties paid  the  pig-iron  producer.  If  no  bounty  was  paid  on 
exports,  the  producers  of  pig  iron  would  be  confined  to  a 
hmited  home  market  where  they  would  sell  more  cheaply 

>  Debates,  pp.  7642-43.  ,  gee  Appendix  B.  Table  I 

»  Iron  Age,  vol.  lx,  September  23,  p.  13. 

*  Debates,  1899.  n.  7042  t  7/>.j    ,<_,.., 

;  E.  Porrit,  Ir'o'nJJleel  Bounties  in  Can^:    ^.^2 

'  Debates,  1896,  p,  5196. 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    137 


than  otherwise.  The  jjroducers  of  the  finished  products 
hoped  to  gain,  not  only  from  reduction  of  the  duties  on  pig 
iron,  bar  iron,  and  steel,  but  also  by  the  grant  of  bounties.' 

IMr.  Foster  objected  in  the  interest  of  Canadian  labor 
and  industrial  development.  He  argued  that  the  charcoal 
iron  produced  in  Quebec  was  used  largely  in  the  States.' 
It  would  be  a  difficult  matter  to  know  before  production 
whether  pig  iron  would  be  sold  at  home  or  abroad,  and 
hence  the  production  of  pig  iron  would  be  an  indefinite 
gamble.'  Mr.  Foster  hoped  that  bounties  would  put  the 
product  in  the  world  market,  and  by  encouraging  a  large 
output,  make  production  profitable  at  lower  costs  and  a 
lower  margin  of  profit.  After  all,  it  was  a  bounty  on  pro- 
duction, not  on  exportation  or  consumption.*  By  the  final 
draft  of  the  bill,  bounties  were  made  payable  on  all  pro- 
duction whether  consumed  in  Canada  or  exported  abroad.* 

To  some  the  revision  of  the  tariff  and  bounty  laws  was 
a  disappointment.  Farmers,  especially,  had  hoped  for  a 
greater  reduction,  but  Mr.  Fielding  calmly  explained  that 
as  the  United  States  Government,  by  passing  the  Dingley 
Tariff,  registered  its  ojjposition  to  concessions,  the  Cana- 
dian Government  had  been  forced  to  modify  its  policy.  It 
also  seemed  advisable  to  go  slow  in  the  introduction  of 
changes  lest  industry  be  too  much  deranged.  Official  re- 
sponsibility had  taken  the  edge  off  the  enthusiasm  for  a 
"tariff  for  revenue  only."  In  presenting  the  schedule,  Mr. 
Fielding  called  attention  to  the  vested  rights  of  the  iron 
and  steel  industry  and  suggested  that  the  industry  was 
well  worth  encouraging  on  a  large  scale.  He  claimed  that 
the  bounties  would  be  automatically  reduced.  Even  though 
they  should  be  large,  there  would  be  a  compensatory  re- 
turn in  the  development  of  industry  and  the  consequent 
increase  of  customs  duties  at  ports  where  the  iron  and  steel 


•  Iron  Age,  vol.  lix.  May  20,  p.  li. 

»  Itrid..  1897.  p.  5193. 

»  60-61  Vic,  1897,  chap.  6. 


»  Debates,  1897,  p.  6188. 
♦  IIAd..  pp.  5189-91. 


Hi 


If! 


Ill 


138    THE  CANADIAN  IRON  AND  STEEL  INDUSTRi' 

industry  flourished.'  It  is  to  be  questioned  whether  the 
Liberal  Party  had  really  intended  at  the  last  moment  to 
make  such  sweeping  changes  as  the  election  platform  prom- 
ised. One  may  be  excused  for  the  suspicion  that  some  ar- 
rangement or  understanding  had  been  arrived  at  between 
the  Liberals  and  the  interested  manufacturers  before  the 
election. 

Altogether,  the  arrangement  was  a  clever  political  solu- 
tion  of  a  very  difficult  political  and  industrial  problem 
By    Liberalizing"  the  bounties  to  cover  the  product  made 
from  imf>orted  as  well  as  domestic  ore.  and  by  increases 
on  the  product  of  domestic  ore.  the  furnace-men  were 
compensated  for  the  reduction  of  the  duty  on  pig  iron  and 
on  scrap  iron  and  steel.    The  reduction  on  bar  iron  was 
acceptable  to  the  manufacturers  and  consumers  of  finished 
products  alike.  The  reduction  of  the  duty  on  puddled  bar 
pig  iron,  and  scrap  iron  tended  to  balance  matters  for  the 
bar-iron  men.  Protection  naturally  had  to  be  diminished 
on  pig  iron,  the  first  of  the  series  of  products,  before  relief 
could  be  given  farther  up  the  scale.   Probably  no  better 
scheme  could  have  been  devised  to  accomplish  so  many 
different  objects.  The  adjustment  was  a  nice  balancing  of 
warring  interests;  and  mine-owners,  smelters,  rolling-mill 
owners,  manufacturers  using  iron  and  steel,  and  consumers 
alike  were  apparently  satisfied,  and  certainly  temporarUy 


§  4.  One  might  have  expected  that  legislation  in  respect 
to  iron  and  steel  would  have  ended  here.  But  suddenly  a 
new  actor,  the  Dominion  Iron  and  Steel  Company,  ap. 
peared  on  the  stage.  The  Nova  Scotia  Steel  Company, 
which  had  been  using  with  fair  success  a  mixture  of  New- 
foundland and  Pictou  County  ores  at  Ferrona.  was  con- 
templating extensions  at  Sydney  Mines,  Cape  Breton. 

«  E.  Porritt,  Iron  and  Steel  Bounties  in  Canada,  pp.  210-17 
iron  Age.  vol.  lxu.  Au^'u^l  i,  p.  jj. 


mSTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    139 


"Mil 


The  Rathburn  interests  of  Deseronto,  Ontario,  were  mak- 
ing charcoal  iron,  the  Hamilton  Company  was  contemplat- 
ing extensions,  and  the  Canada  Iron  Furnace  Company 
was  building  at  Midland.  But  above  all,  the  Dominion 
Coal  Company  interests  were  considering  the  establish- 
ment of  works  at  Sydney,  Cai)e  Breton,  and  were  prepared 
to  build  provided  the  bounties  were  assured  for  a  certain 
period.'  By  1898  the  control  of  one  half  to  two  thirds  of 
the  ore  deposit  at  Bell  Island  had  passed  into  the  hands  of 
a  Boston  promoter  and  other  persons  connected  with  the 
Dominion  Coal  Company,  and  even  at  this  time  prelim- 
inaries had  been  begun  for  the  organization  and  promotion 
of  the  Dominion  Iron  and  Steel  Company.^  This  Whit- 
ney Syndicate,  as  it  was  called  before  obtaining  its  char- 
ter, made  overtures  to  the  Laurier  Government  for  an 
extension  of  the  period  of  bounty  i)ayments.'  Moreover, 
the  Nova  Scotia  Steel  Company  had  refused  to  build  at 
North  Sydney  unless  the  Government  would  give  assur- 
ance of  continuance  of  bounties  after  1902.* 

Thus  it  was  that,  in  1899,  the  Bounty  Act  *  was  amended 
■;v  adding  to  the  Act  of  1897  a  provision  that  the  bounties 
should  be  continued  from  1902  to  1907  on  a  decreasing 
scale.  The  rates  set  forth  in  the  1897  schedule  were  to  de- 
crease as  follows:  for  the  period  from  April  23,  1902,  to 
June  30,  1903,  90  per  cent  of  the  previous  bounties;  1904, 
75  per  cent;  i  '>\)5, 55  per  cent;  1906,  35  per  cent;  and  1907, 
25  per  cenv.  Mr.  Tie^ding  explained  that  the  object  <>f  tils 
extension  was  to  give  the  industry  a  reasonable  measure 
of  encouragement  especially  as  considerable  development 
was  expected '  as  a  result  of  the  ^r^unty  law.  Moreover, 
the  establishment  of  a  successfu.  i.  on  industry  assists  the 
development  of  many  other  industries.^  For  instance,  Mr. 

•  Debates.  1899.  pp.  4971-73. 

'  E.  Porritt,  Iron  and  Steel  Bounties  in  Canada,  p.  2M. 

,  oji.  cit.,  p.  53.  *  Iron  Age,  vol.  lxi.  June  30,  p.  4. 

1899,  chap.  8;  sei  Appendi:-  1>. 


'  Jeans, 
*  62-C3  Vi 


Debates,  1899,  p.  4967. 


Ibid.,  pp.  4971-73. 


li' 


UO    THE  CANAIH  V\  lUON  AND  STEEL  INDLSTRY 

Fielding  hoped  for  'f  d«-\(lop..ient  of  shipbuilding  in 
Canada.*  The  (lovem  lent  '^o  wished  to  give  the  Domin- 
ion Iron  and  Steel  ('<)ini)ain  th«  assurance  that  bounties 
would  he  forthconiiig  for  ;it  least  five  years  after  the  first 
blast  furnace  at  Sydney  could  })e  put  on  the  Iwunt  .  list  at 
Ottawa.-  While  this  ivct  wa«  ,<asst'<  three  years  l)eft)re  the 
e.Ki>irati()n  of  the  Act  of  189  .  wa  an  advantag.  that  the 
bounties  were  a.ssured  for  eii'li,  yea.-  —  the  longest  jH'riod 
for  which  bounties  ever  ha  i  lien  pi  »vide<l  in  advance 

This  act  had  the  further     1  vant.i^e  of  pnividing  a  means 
of  gradually  letting  the  industry  ->   lui  unaided.  Some  ob- 
jected to  the  bounty  syst<  u     ,.  ..g.     ,  r;  othe  -  preferred  to 
make  it  a  permanent  part    -f  the  fl^cji!  sy>.n-m,  but  the 
Government  struck  the  hai)py  n.'<i!t!m     Ha\  'ig  found  a 
bounty  .system  in  operation,  it  uas  rca^iv-  to  continue  it 
for  a  time  in  order  that  the  industries  gruu  i  .[t  up  should 
get  firmly  established  and  be  able  to  st;,     '  alon«    wifliin 
a  reasonable  time.*   Although  Mr.  Whitnc\  had  asked  f.  r 
the  maximum  bounti(>s  for  five  years,  the  graduated  scale 
was  deemed  sufficient  for  the  purpose."  The  <  onservative^, 
too,  were  favorable.   Mr.  'rui)i>ef  even  wanta!  the  bounty 
on  iron  made  from  Canadian  ore  applied  to  aii  iron  made 
from  British  North  American  ore,  so  that  the  >    w-foun'* 
land  iron  deposits  might  aid  the  development  of  lite  Cau.^- 
dian  iron  industry.® 

In  1901  and  WH  the  amount  of  bountie  Daid  was  the 
subject  of  considerable  discussion.  The  prosix  a^  «  f  the 
Dominion  i.'.n  and  Steel  Company  w.is  (p-oteti  (  .  show 
that  large  payments  were  exjjected.  Other  imporant 
comi)anies  were  being  formed,  and  it  was  feared  thai  the 
payments  would  l)ecome  unduly  heavj  s  the  comj  lies 
fcTew.  An  establishment  like  that  of  the  Dominion  iron 
and  Steel  Company,  with  a  capit  d  of  $2.5,000.000,  .  juid 


'  Debates,  1899,  p.  Hm. 
'  Debates.  1899.  p  4974. 


'  E.  Porritt.  The  R^-Jt  in  C>,iadu 
*  Ibid.,  p.  4977. 
"  Hid.,  p.  »a7(i. 


117 


m 


:*•    ^ 


HISTORY  OF  TARIFF   VNL»  BO  I  N'T  Y  <\>rEM     1,1 


lijtnlly  l»e  call*' 
swcrc'l  tliis  (Ti 
f'-o  dev<  lopni' 
growth  oi  trai 


a  strii4^'''n^  it  lair.'    I\       Ficldinp  an- 

sm  xvitii  his  weli-kri  iwai  argument  that 

of  ('h    ii'  ltistr\    "niiM  result  in  such  a 

aid  pr         ity  k       untiy  that  there 


would  Jhj  no  loss  to  tli<   =  lovei 


( 


§  5.  DiflTh  >ilti*  .vith  ■  le  iron  r 
never  to  c'n)  T'u.s  wHo  u  iirm  of 
^f  lies  ami,    aerctor     *'or  t  ana  u. 

Auk  .    -an  .       1   •'■       Wir 
(  iiiad    n  wirt   mu,    -  t,  esp" 
wire,  .1.   1  numbvr   i).    !,  anu 
C(Jiue  ii  ''    ('jii  a. la  f    e  sinct- 
United  Slates  Ste  1  (    >rt>ora'ior  v 
Canadian     uli;     r     sf     njcl 
tories  had      'ap,  !el>        <"n  u 
ties.'   It  ^'         ven  fd  tV 

wire     '  Ca       a  w       ..      ^k. 

iiei':    m  trust      \  "til  l^'O' 


1  ?^rol  schedulf      omed 
I'pi   ssion  in  tin   Lni  vxl 


)n 


■inp; 
lly 
gu. 
18*>, 


h 


(Jompi.       had  !: 


secu! fd 
iron  an     -.tet'i     1 1  .'  was  ; 
of  boui  ii'-^  ii        '^flect. 
It  V.  iS     oint.  Li  oi  '  ■ 
was  no,  ket  ping  up  V 
>rms    A'ero  now  b( 

Ssi-it-TiPe   ir.        iC   fo   ai 

an  v^'l    Co 

iijih  the  n 
iviii- 

il    '      '. 


T.  The 
'  e«   .in)i  of  the 
..  :-ket   '  ,  barbed 
1  •  v'hich  had 

:.s  h  of      le 

y  f  e 
ladiaii 
ring  these  vti  - 
)f  i)iactically  dl 
>•  under  the  control  of  the 
ii  Ooininion  iron  and  Steel 
*lrm  hold  on  the  market*  for 
lis  time  that  the  sliding  scale 


that 

uif. 


e  t   rifT  and  bounty  system 
aidu        .    Ilails  and  struct ural 
.nufai    irod,  and  sh(  ild  have 
,   an 'Mi«  r.    The  Dominion  Iron 
■any   v  is  ready  to  produc-e  wire  rods, 
lifactu.ors  of  steel  billets  and  ingots  were 
boi      V  of  ^^2  per  ton,  manufacturers  of  struct u- 
'"'ved  !   )thin;  '"'   While  structural  sl'v;  weigh- 
ts p<       Is  ]H'T  yard  paid  a  duty  of  $V  per  t<  -ti. 


til  rhiiit;  D   <T' 

diacn.  anation  was 

nehatei.  1901,  p   1170. 
/.wi.,  1903,  p.  7D53. 
Ikid..  p.  7977. 


iig  alraitted  free  of  duty.  Tliis 
actually  to  discourage  the  produc- 

»  Ihlif..  1901,  p.  1171. 

*  Ihi-L,  [!.  VX)d. 

*  Industrial  Canada,  vol.  n,  p.  321. 


i. 

.PC 

Ik- 

r 


a  r 


!!■ 


ti! 


■  It 


iii 


142    THE  CANADLVN  IRON  AND  STEEL  INDUSTRY 

tion  of  heavier  sections.^  The  tariff  and  bounties  of  1897 
protected  the  Nova  Sfxitia  Steel  Company's  products,  but 
no  provision  had  been  made  for  those  of  the  Dominion  Iron 
and  Steel  Company.  The  latter  could  not  produce  the 
protec-ted  products  because  the  market  was  too  small  for 
both  companies.2  Thus,  the  bounty  and  tariff  system  was 
assisting  the  production  of  only  certain  products  and  the 
work  of  only  special  companies. 

The  manufacturers  were  not  entirely  in  favor  of  the 
bounty  system.    They  pointed  out  that  the  duties  on 
nearly  all  articles  were  considerably  lower  tlian  those  im- 
posed  by  the  United  States,' even  though  the  United  States 
market  was  very  large  and  the  industry  well  developed.* 
After  getting  the  different  manufacturers  to  concur  in  the 
proposals  for  protecting  the  different  grades  of  raw  mate- 
rials, the  Canadian  Manufacturers'  Association  presented 
a  tariff  in  1903  framed  on  the  basis  of  the  United  States 
tariff.    They  asked  for  the  following  advance  of  duties: 
on  pig  iron,  from  $2.50  a  ton  to  $3;  steel  rails,  from  $7  to 
$8;  steel  billets  from  $2  to  $4;  structural  steel,  $7  for  all 
sizes  up  to  45  pounds  per  yard  as  opposed  to  the  former 
limit  of  35  pounds  per  yard;  and  on  wire  rods,  which  were 
free,  a  duty  of  $6  per  ton  was  asked."  In  1903,  Mr.  Borden, 
the  leader  of  the  Opposition,  introduced  a  resolution  iii 
favor  of  increased  protection  to  the  iron  and  steel  indus- 
try in  the  form  of  higher  duties  on  finished  articles  largely 
imported.' 

The  question  of  a  readjustment  of  iron  duties  was,  how- 
ever, a  delicate  matter.  Many  changes  are  necessary  if 
one  item  is  touched.  A  'jonunotion  is  started  among  the 
maimfacturing  interests  every  time  the  schedule  is  revised. 
It  is  difficult  to  harmonize  all  the  warring  interests.'  The 


'  Monetary  Times,  vol.  xxxvil.  p.  580. 
*  Indiittrial  Canada,  vol.  in,  p.  M\. 
'  Iron  Age,  vol.  lxx,  March  19,  p.  i3. 
'  Iron  Age,  vol.  Lx.\i,  January  15,  p.  ii. 


'  Debate*,  lfl0.1,  p.  4201. 

*  Debate*,  19()3,  p.  4^70. 

•  Debates,  1903,  p.  3804. 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    143 


Government  hesitated  to  impose  duties  on  wire  rods  used 
for  making  wire  fencing  for  the  farmers.  Cheap  iron  for 
Canada  was  as  necessary  as  cheap  food  for  Great  Britain. 
A  high  tariff  on  certain  iron  products  which  could  not  be 
cheaply  produced  would  destroy  the  '  alance  of  the  iron 
schedule.  Certainly  it  had  injured  the  Conservative  Party 
in  1894.  For  these  reasons  the  tariff  proposed  by  the  Ca- 
nadian Manufacturers'  Association  was  not  accepted  and 
the  Borden  Resolution  was  rejected  as  quite  inoppor- 
tune.* 

But  some  answer  had  to  lie  given  to  the  various  demands, 
indu  'al  and  political.  Hence  it  was  that  the  bounty  sys- 
tem caine  in  for  revision  again.  The  law  of  1899  was  so 
amended  as  to  provide  that  the  decline  of  bounties  should 
be  delayed  by  one  year,  although  the  bounties  by  a  differ- 
ent system  of  gradation  were  still  to  disappear  in  1907. 
At  the  same  time,  the  bou-  ties  were  extended  to  a  new  line 
of  finished  products,  especially  those  which  were  about 
to  be  made,  and  which  were  the  subjeci  of  most  discussion 
by  the  Canadian  Manufacturers'  Association.  On  articles 
produced  from  steel  manufactured  in  Canada  from  com- 
ponents of  which  not  less  than  50  per  cent  of  weight  con- 
sisted of  pig  iron  made  in  Canada,  the  bounties  were  to  be 
as  follows:  on  rolled  round  wire  rods,*  $6  per  ton;  on  struc- 
tural material,'  and  rolled  shapes*  and  plates,'  $3  per 
ton.    The  producer  was  required  to  furnish  satisfactory 


>  Debates,  lOO.'J,  p.  4S41. 

*  Less  than  three  quarters  of  an  inch  in  diameter,  when  sold  to  wire 
manufacturers  for  use  in  making  wire  in  their  own  factories  in  Canada. 

'  Rolled  anglr.s,  ties,  channels,  beams,  joists,  girders,  or  bridge-building 
or  structural  sections. 

*  Not  round,  oval,  square,  or  flat,  weighing  not  less  than  S5  pounds 
per  yard,  and  also  on  flat-eye  bar  blanks,  when  sold  for  consump'ion  in 
Canada. 

*  Not  leas  than  30  inches  in  width  and  not  less  than  one  quarter  of  an 
inch  thick,  when  sold  for  consumption  in  Canuda  for  manufacturing  pur- 
poses for  which  such  plates  are  usually  required,  not  including  plates  to 
be  sheared  into  plutcs  of  less  width. 


f 


!i 


Bil 


144    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

proof  that  the  articles  were  produced  in  Canada  and  sold 
to  Canadian  consumers.' 

Opinions  on  the  new  arrangement  varied.  Most  manu- 
facturers began  to  feel  that  bounties  could  not  be  piled  up 
without  provoking  public  disapproval.  The  more  success- 
ful the  system,  the  larger  the  sums  the  Treasury  would 
have  to  pay  out.  There  was  no  disguising  this  form  of  ex- 
penditure, especially  as,  after  1900,  it  had  been  charged  to 
capital  account.  Of  course,  the  burden  would  fall  largely 
on  the  general  public  who  would  contribute  to  the  revenues 
chiefly  by  paying  duties  on  imports  of  a  different  charac- 
ter. As  bounties  came  manifestly  from  the  people,  they 
were  likely  to  be  unpopular." 

IVIr.  G.  E.  Drumraond,  of  the  Canadian  Manufacturers' 
Association,  believed  that  the  bounties  of  1903  would  be 
a  very  valuable  aid  because  they  dealt  with  goods  about 
to  be  manufactured.  Since  bounties  on  finished  products 
give  a  motive  to  carry  production  beyond  the  primary  stage, 
he  expected  that  rolling  mills  would  be  hurried  to  comple- 
tion.' Mr.  Drummond,  however,  would  have  preferred 
protective  duties. 

Even  if  the  revision  of  1903  was  not  entirely  satisfactory, 
the  Algoma  Steel  Company,  which  had  recently  l>egun  to 
make  steel  rails,  decided  to  make  the  most  of  it.  By  taking 
Bxlvantage  of  the  faulty  wording  of  the  law,  they  claimed 
bounties  for  steel  rails  under  the  term  "other  rolled,  not 
round,  shapes."    An  account  for  $60,000,  on  steel  rails 
bought  by  the  Government  itself,  was  htndcd  in.    The 
claim  was  disputed  by  the  Government  and  the  Auditor- 
General  refused  to  pay  it.*  In  1905  the  Government  passed 
an  Order-in-Council  providing  that  the  bounty  hitherto 
paid  on  steel  rails  should  no  longer  be  paid.   It  held  that 
the  original  reason  for  granting  the  bounty  was  the  en- 
couragement of  the  manufacture  of  structural  steel  for 


'  3  Ed.  VII,  1903,  (Imp.  (t8. 
•  Ibid.,  July  23.  p.  11. 


•  Iron  Agf,  vol.  uucii,  July  16,  p.  18. 

*  Ihid,,  vol.  UEXv,  p.  6S«. 


fflSTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    145 

bridge-making  and  other  purposes.'  A  duty  of  $7  per  ton 
had  already  been  provided  for  steel  rails.'' 

§  6.  The  next  important  revision  came  in  1906.  For 
several  years  the  Goverament  had  been  pressed  to  revise 
the  tariff,  but  it  had  hesitated  in  favor  of  tariff  stability. 
In  1905  a  tariff  commission  was  appointed,  and  meetings, 
at  which  the  iron  and  steel  interests  adequately  presented 
their  case,  were  held  throughout  the  country.  A  company, 
established  at  Morrisburg  to  manufacture  tin  plate,  asked 
for  protection.  It  claimed  that  it  had  started  the  mill 
in  expectation  of  either  bounties  or  protection,  neither  of 
which  had  been  granted.  The  farmers  were  objecting  to 
any  extension  of  the  bounties  on  any  iron  and  steel  branch, 
and  the  tinware  manufacturers  in  Toronto  and  the  canning 
factories  of  Ontario,  British  Columbia,  and  Nova  Scotia 
objected  to  new  duties  on  their  raw  materials.  Consumers 
declared  that  Canada  was  not  ready  for  the  establishment 
of  a  tin-plate  industry.  The  demand,  at  reasonable  prices, 
was  not  sufficient  to  justify  the  operation  of  a  plant  on  a 
scale  large  enough  to  make  the  industry  profitable.' 

While  the  producers  of  primary  products  asked  for  in- 
creased duties,  the  rolling-mill  deputation  protested  against 
any  increase.  They  held  that  the  duties  on  billets  and 
other  articles  should  be  left  as  before,  inasmuch  as  it  was 
impossible  to  get  adequate  supplies  of  all  grades  of  iron 
and  steel  in  Canada.*  The  Dominion  Iron  and  Steel  Com- 
pany asked  for  special  protection  against  the  United 
States  Steel  Corporation  in  respect  to  wire  rods,  but  wire- 
makers  claimed  that  if  duties  were  imposed  on  their  raw 
material,  some  compensatory  advantage  should  be  given.* 
Makers  of  ba-'-"d  and  galvanized  wire  wanted  a  duty  of 
25  per  cent  i  -  to  enable  them  to  shake  off  the  domi- 

'  Canadian  An         Review,  1005.  p.  l.'SO. 

«  S  Ed.  VII.  190S,  chap.  15.  »  Iron  Age,  vol.  lxxvti,  p.  1658. 

*  Ibid.,  p.  iC3i.  5  Canadian  Annuai  Reriew,  1«03,  p.  15tf. 


nl 


»v 


^H 


11^ 
If 


146    THE  CAXADI.VN  IRON  AND  STEEL  mDUSTRY 

nation  of  tic  United  States  Steel  Corporation.'  The  cold- 
drawn  sho]  I  !an»s  of  Hamilton  asked  for  increased  pro- 
tection to  compensate  them  for  duties  on  their  raw  mate- 
rials, anr!  the  cast-iron  pipe  men  asked  for  protection  against 
British  dumping. 2  The  Montreal  Steel  Company  wanted 
higher  duties  on  steel  castings,  railway  switches,  and  frogs, 
to  offset  high  duties  on  spc  -ial  grades  of  pig  iron  and  coal.» 
A  proposal  to  abolish  the  duty  of  5'.i  cents  per  ton  on 
coal  for  coking  purj)o.ses  was  the  occasion  of  considerable 
discussion.    The  Nova  Scotia  coal  companies,  of  course, 
objected  to  the  abolition  of  the  duty.*    The  Ontario  iron 
industry  had  to  admit  that  the  Nova  Scotia  iron  indus- 
try was  not  handicapped  by  the  duty  on  coal,  for  coal 
deposits  were  in  close  proxinuty  to  the  furnaces  and  the 
Province  granted  a  rebate  of  .jue  half  of  the  royalty  of  12| 
cents  per  ton  on  coal  used  in  the  manufacture  of  iron. 
Ontario,  on  the  other  hand,  handicapped  by  dependence 
on  Pennsylvania,  demanded  an  equalization  of  conditions.^ 
When  the  Algoma  Steel  Company  declared  that  the  loca- 
tion of  its  new  coking  plant  on  the  Canadian  side  or  at 
the  American  "Soo,"  depended  on  its  use  of  free  coal,«  the 
Government  decided  to  admit  coal  for  the  iron  industry 
practically  free  of  duty.^ 

In  the  new  tariff,  presented  in  1906,  an  attempt  wa.s 
made  to  classify  items  as  nearly  as  possible  in  groups,  met- 
als and  manufacturers  of  metals  making  up  Class  8.  In 
this  revision  the  iron  and  steel  schedule  was  again  the  chief 
subject  of  alteration.  Some  changes  were  made  in  the 
working  of  the  tariff.  Lists  of  drawbacks  and  of  prohibited 
goods  were  appended.  A  new  "Intermediate  Tariff,"  }>e- 
tween  the  general  and  British  preferential  tariffs,  was  in- 
troduced  as  a  bait  to  countries  which  would  give  as  favor- 

>  Irnn  Age,  vol.  lxxvi.  p.  .'503.  »  Ibid.,  pp.  .574-7.<l. 

•  Ibid.,  p.  j(«.  *  Drhale^,  llHW-07,  pp.  .1771-72. 

»  Iron  Age,  vol.  lxxvi,  p.  600.  •  Ibid.,  vol.  Lxxv,  p.  1145. 

'  Drawback  {rf  99  per  ixal  uf  the  duty. 


■m 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    147 


able  conditions  as  those  offered  in  such  intermediate  tariff. 
In  order  to  simplify. calculation,  units  of  2§  per  cent  were 
adopted. 

Altogether  about  120  items  were  included  in  the  iron 
and  steel  schedule.  Not  all  items  were  changed  and  many 
changes  were  unimportant,  since  the  demand  for  the  goods 
was  very  small.  As  a  concession  to  the  Western  farmers, 
there  were  slight  decreases  of  about  2^  per  cent  on  some 
thirty  classes  of  agricultural  implements.  Drawbacks  of 
95  to  99  per  cent  were  given  on  certain  kinds  of  iron  and 
steel  imported  and  used  in  the  manufacture  of  certain 
articles  exported  from  Canada.  The  bounties  on  angles, 
plates,  and  structural  sections  were  abolished,  and  imports 
of  those  articles  were  subjected  to  a  duty  of  $7  per  ton  in 
place  of  a  duty  of  10  per  cent  plus  a  bounty  of  $3  a  ton. 
No  duty  was  imposed  on  tin  plate.  Coal  used  for  the  pro- 
duction of  coke  used  in  smelting  was  practically  exempted 
from  duty  by  provision  for  a  drawback  of  99  per  cent  of  the 
duty  paid.' 


■r« 


§  7.  The  revision  of  1906,  like  that  of  1897,  cannot  be 
fully  understood  without  some  knowledge  of  the  discussion 
centering  around  the  bounties.  In  the  previous  session, 
Mr.  Conmee,  of  Thunder  Bay  district,  had  introduced  a 
bill  to  revise  the  bounties  on  iron  and  steel  and  to  make  a 
greater  distinction  between  the  use  of  foreign  and  of  domes- 
tic ore.  He  hoped  for  a  great  development  of  the  iron  de- 
posits of  Canada,  especially  in  the  Thunder  Bay  district. 
He  claimed  that  no  one  would  contend  that  Canada  as  a 
nation  should  continue  to  pay  bounties  on  iron  made  from 
ore  from  any  foreign  country,  when  she  has  within  her  own 
l)orders  abundant  ore  of  good  quality.  He  pointed  out 
that  the  bounties  had  developed  the  industry,  but  largely 
on  a  basis  of  foreign  ore.  He  urg»*d  that  the  bounties  were 
so  small  in  1906  (55  per  cent  of  the  1902  scale)  that  Cana- 

»  6-7  Ed.  VII,  1906-07,  chap.  11. 


•,  I 


!H^ 


!l 


i 


III 


llii 


148    THE  CANADLVN  IRON  AND  STEEL  INDUSTRY 

dian  ore  had  little  advantage,  especially  as  iron  ore  entered 
Canada  free  of  duty,>  and  as  the  dumping  clause  did  not. 
therefore,  apply.^  Why  should  Canadian  industry  be  de- 
pendent on  foreign  raw  materials?  Mr.  Conmee  believed 
that  the  development  of  Canadian  ores  and  mines  would 
be  a  W7se  precaution  against  any  possible  distm-bance  of  in- 
f  uma!^?^    ^'"^'^  ^"^  *^^  consequent  closing  of  Canadian 

The  Government  took  the  view  that  to  keep  Canadian 
smelters  going  n-ith  American  or  Ne^-foundland  ore  and 
to  develop  the  mdustry  with  Canadian  labor  an.'    apital 
would  be  more  important  than  to  mine  Canadian  iron  ores. 
The  time  wiU  come  when  Canada  wUl  need  her  own  ores. 
Mmes  do  not  last  forever.*  The  Dominion  Iron  and  Steel 
Company  argued  that  it  was  reasonable  to  pay  bounties 
on  the  product  of  foreign  ore  in  order  to  maintain  and 
stimulate  the  mdustry  until  Canadian  mines  could  be  de- 
veloped, especially  as  it  was  necessary  to  import  some  ore 
to  mix  ,vith  the  native  supplies.'    It  urged  the  renewal  of 

ruru^ufT  "'^  ^^"^  ^"""^  ^^^^  t»^^  t'"»«  "quired  to 
es  abhsh  the  Sydney  mdustry  had  been  much  prolonged  by 
delays  and  difficulties.  The  company  was  not  in  the  as- 
sured  position  which  it  had  expected  to  reach  before  the 
expiration  of  the  bounties;  moreover,  for  this  very  reason 
the  Government  had  not  been  called  upon  to  pay  as  much 
as  had  been  expected  at  Ihe  outset.' 

Mr  Fielding  had  advocated  that,  in  1907.  the  bounties 
should  be  abolished,  and  the  duties  further  reduced  ^  Yet 
Mr.  Conmee  and  the  iron  and  steel  interests,  who  appeared 
before  the  Tariff  Commission,  seem  to  have  succeededin 
presenting  a  satisfactory  case,  and  in  1})06  the  bounty 
system  was  reinstated  for  another  four  years.    Bounties 

>  Debaif^,  IflOfl.  pp.  3749-30.  i  /^    _  »-,. 

IM.,  p.  3755.  *  Ibid.,  p.  3770  .  IM    nn^Jo-,, 

n  Z""'"'  '''"'  ""^  '""^  BoulJin  Canada.  p.^M  "''•  '"'*-''• 
'  Debatet,  18fl»,  p.  487Q.  *^     *°' 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    149 

were  made  payable  on  pig  iron  made  in  Canada  from  Ca- 
nadian and  from  foreign  ore;  on  puddled  iron  bars  made  in 
Canada  from  pig  iron  made  in  Canada;  on  steel  manufac- 
tured from  ingredients  of  which  not  less  than  50  per  cent 
of  weight  consists  of  pig  iron  made  in  Canada;  on  rolled 
round  wire  rods;  and  also  on  pig  iron  made  in  Canada  from 
Canadian  ore  by  process  of  electric  smelting,  and  on  steel 
manufactured  in  Canada  -. .  electric  process  direct  from 
pig  iron  manufactured  by  electricity  in  Canada  from  Cana- 
dian ore  during  the  calendar  years  as  follows:  — 


Pig  iron  manufactured 

Steel 

\>.r 

(calcndu) 

From 

From 

By 

Puddled 

Wire 
roda 

MTd  by 

Canadian 

foreign 

electric 

iron 

Ordinary 

electric 

ore 

ore 

proceu 

bar* 

procoa 

1907 

l«.10 

«1.10 

•l.(U 

•8.00 

11.65 

IM8 

2.10 

1.10 

1.63 

6.00 

1.65 

1608 

1.70 

.70 

HIO 

1.05 

0.00 

l.OS 

li.es 

IVIO 

.90 

.40 

i.\0 

.60 

6.00 

.60 

1.65 

1911 

1.0  J 

1.0S 

19U 

.65 

.65 

It  was  further  provided  that  the  bounty  on  pig  iron 
might  be  paid  on  molten  iron  used  in  the  manufacture  of 
steel  by  the  direct  electric  process,  the  weight  of  such  iron 
to  be  ascertained  from  the  weight  of  the  steel  so  manufac- 
tured.' 

Thus,  a  nice  discrimination  was  made  in  favor  of  the 
Canadian  ore,  while  the  current  rate  on  iron  produced 
from  foreign  ore,  on  puddled  bars,  and  on  steel,  was  simply 
extended  at  a  declining  rate  until  1910.  In  view  of  the 
fact  that  it  requires  two  years  to  establbh  such  smelting 
furnaces,*  the  rates  of  iron  and  steel  made  by  electric 
process  were  to  apply  from  December  31,  1908,  to  Decem- 
ber 31,  1912.  A.S  we  have  already  seen,  the  bounties  on 
structural  sections,  plates,  etc.,  were  abolished  in  favor  of 
customs  duties. 

»  7  Ed.  VII,  ld07,  chap.  H.  »  Debaies.  190G-07,  p.  7*5*. 


^"m 


I',- 


Mti 


-fli' 

111 
]W 

fir 


150    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

This  act  unlike  the  Act  of  1897,  did  not  provide  for  the 
payment  of  bounties  on  iron  and  steel  exported  from  Can- 
ada   As  Mr.  Fieldins  had  foreseen,  the  Secretary  of  the 
Lnited  States  Treasury,  on  complaint  of  American  pro- 
ducers, was  threatening  to  imiK)se  countervaUing  duties 
on  Canadian  iron  and  steel.'  British  m>n-makers  had  also 
been  protestmg.    Indeed,  international  complications  or 
tenff  wars  were  imminent.*  Pig  iron  of  varying  amounts 
had  been  exported  to  the  United  States  and  elsewhere  con- 
tinually after  1897;  $55,448  in  1896,  $149,000  in  1899 
$778,619  in  1902,  and  $22,284  in  1905.3    Countervailbg 
duties  would  have  completely  excluded  such  goods  from 
the  Inited  States.   Besides,  with  the  occasional  large  ex- 
ports, the  force  of  the  old  argument  that  bounties  on 
^orts  ^-ould  help  mamtain  prices  in  Canada  may  easily 
be  seen.  That  the  consumers  of  pig  iron  would  urge  their 
old  objection  against  bounties  which  might  provoke  coun- 
tervailing duties  on  finished,  as  well  as  primary,  products 
entermg  the  Un:ted  States,  was  a  foregone  conclusion. 
Furthermore,  it  was  noised  abroad  that  the  United  States 
bteel  Corporation  would  buUd  in  Canada  in  order  to  secure 
the  benefit  of  the  bounties.*  The  act,  therefore,  provided 
that  bounties  should  be  paid  on  pig  iron.  bars,  and  steel, 
only   when   manufactured   in   Canada  for  consumption 
therem:  further,  that  no  bounty  should  be  paid  on  steel 
mgot^  from  which  steel  blooms  and  billets  for  exportation 
from  Canada  were  manufactured,  except  that  no  prohibi- 
tion was  made  of  payment  of  bounties  on  exports  of  iron 
and  steel  manufactured  by  electric  process.'  Tho  Customs 
Act  Amendment  of  that  year  (1907)  made  furtner  provi- 
sion that  every  person  who  desired  to  export  any  such 
articles,  subject  to  a  bounty  when  used  for  home  consump- 


'  Ibid.,  vol.  utxxii,  p.  1081. 


•  Iron  Age,  vol.  ljcxii,  p.  4. 

•  See  Appendix  F. 


:'UlHi:i^-"-M!-.\'i 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    151 

tion,  but  not  for  exportation,  should  file  with  the  nearest 
Collector  of  Customs  a  written  application  for  permission 
to  export  and  a  declaration  that  the  bounty  had  not  been 
paid,  that  it  would  not  be  claimed,  or  that,  if  paid,  the  sum 
had  been  refunded  to  the  Government.' 

Various  farming  and  grain-growing  interests,  in  sixty- 
five  petitions  against  the  renewal  of  the  bounties,  insisted 
that  the  industry  had  reached  a  stage  where  it  could  stand 
on  its  own  feet.''  In  a  caucus  of  the  Liberal  Party,  some 
stood  by  the  farming  interests  by  asking  for  an  abandon- 
ment of  the  bounty  on  pig  iron  made  from  imported  ore,, 
but  this  suggestion  was  opposed  by  Nova  Scotia  interests.'!. 
The  Opposition  even  insinuated  that  the  chief  beneficiary  i 
of  the  bounty  syst»>m,  the  Dominion  Iron  and  Steel  Com-  j* 
pany,  was  located  in  Nova  Scotia,  the  Province  of  which 
Mr.  Fielding  was  the  political  leader.* 

In  reply,  Mr.  Fielding  argued  that  it  was  as  proper  to 
pay  bounties  in  1907  as  in  1887.'  If  bounty  legislation  was 
not  adopted,  then  customs  duties  would  have  to  be  in- 
creased all  round  or  else  the  industry  would  fail  and  dis- 
appear. As  wire  rods,  on  which  bounties  had  been  paid 
since  1904,  were  not  finished  articles,  the  Government  re- 
fused to  impose  a  duty  that  would  necessitate  changes  of 
duties  on  other  articles  made  from  iron  and  steel.* 

To  .some  objection  raised  against  the  expenditure  in- 
volved. Mr.  Fielding  replied  that  the  Treasury  had  not 
and  would  not  lose  a  cent  on  the  payment  of  bounties.  He 
had  always  claimed  that  the  iron  and  steel  industries  estab- 
lished in  the  country  had  developed  trade  a  long  distance 
from  the  plants,  for  not  only  had  the  trade  centers  of  Can- 
ada sold  to  these  industrial  centers,  but  above  all,  millions 
had  been  paid  into  the  Treasury  at  the  various  ports 

'  Customs  Act  Amendment  Act,  1007. 
'  E.  Porritt,  The  Rerolt  in  Canada,  p.  134. 

*  Iron  Age,  vol.  ucxix,  p.  488. 

*  E.  Porritt.  Sixty  Yean  of  Protection  in  Canada,  p.  4.54. 

'  Debates,  1906-07.  p.  4961.  •  Ibid.,  pp.  .<Jll-18. 


.'^1^ 


t 


i'-'-.^S'ii-i^.--^ 


Js 


;!( 


;!( 


152    THE  CAN.VDIAN  IRON  AND  STEEL  INDUSTRY 

(much  by  the  iron  and  steel  companies  themselves)  that 
had  lieen  de^•eIoIH>d  by  the  Krowth  of  the  iron  and  steel 
industry      The  "Soo."  Sydney.  North  Sydney.  Sydney 
Mines.  Glace  Hay.  and  New  Glasgow  were  small  ccntera 
before  the  de^  elopnient  of  the  industry,  and  the  growth  of 
Hamilton  had  uu.Joubtcily  l,een  greatly  advanced  by  the 
presence  of  the  iron  and  steel  industiy.    He  estimated, 
therefore,  that  tlie  increase  of  customs  duties  at  such  porta 
had  almost  fully  reimbursed  the  Treasuiy.  and.  certainly. 
If  Idee  supplies  entered  at  St.  John.  Halifax.  Toronto.  Mon- 
treal.  and  Quebec  Ih;  counted,  it  might  be  considered  that 
every  dollar  had  been  returned  to  the  Government  '  This 
argument  has  been  Afr.  Fielding's  chief  defen.«e  of  the 
bounty  system  at  various  periods  of  criticism  throughout 
the  Liberal  regime.  There  is  no  doubt  whatever  that  the 
customs  receipts  at  such  places  have  greatly  in<-rea^ 
during  ihe  past  fifteen  years.  Between  1897  and  1901  they 
mcreased  by  $1,711,815  per  year,  whereas  only  $1,247  341 
was  paid  as  bounties.^  Between  1900  and  1909.  the  increase 
amounted  to  over  $9,000,000.  principally  due  to  the  dcvel- 
opment  of  the  iron  and  steel  industry."  About  $11,000,000 
was  paid  in  bounties  during  that  period.* 

Unfortunately.  Mr.  Fielding  overlooked  the  considera- 
tion  of  one  very  simple  but  frequently  neglected  fact- 
name  y.  that  a  large  part  of  the  industry  had  been  devel-' 
oped  by  conditions  quite  independent  of  the  bounty  sys- 
tem. Just  m  so  far  as  the  industry  would  have  been,  or  has 
been,  developed  for  other  reasons,  the  bounties  paid  rep- 
resent a  direct  expenditure  of  the  Federal  Government 
uncompensaUd  by  an  increase  of  the  duties  collected  be-* 
cause  they  would  have  been  paid  to  the  Treasury  whether 
or   not  the  Ijounty  system  had  existed.     What  part  of 
the  industry  would  have  been  developed  without  the  boun- 
ties may  be  determined  later.    In  the  mean  time,  it  is 

■  Debatr,.  l!K)fi-07.  p.  3702.  =  InduHrial  Canada,  vol.  iv.  p.  65 

(  anad.  n  M.>nna  Journal,  vd   x.X".  p.  208.         i  See  Ap^etidu  E. 


HISTORY  OF  TARIFF  AND  BO    N'TY  SYSTEM    158 

important  to  notice  the  Minister's  uncritically  accepted 
assumption. 

§  8.  One  might  almost  think  that  the  Liberal  Govem- 
ment  had  developed  a  habit  of  renewing  the  Iwunty  sys- 
tem; certainly  it  had  set  several  precedents.  Furthermore, 
the  loss  of  Liberal  seats  in  the  election  of  11M)8  was  an  item 
in  favor  of  retention  of  the  bounties.'  The  iron  and  steel 
interests  were  favoring  an  extension  to  cover  steel  ship- 
building.* They  also  held  thai  1910  was  a  bad  year  in 
which  to  remove  the  bounties,  since  the  German  Surtax  had 
but  recently  been  al)olished.  The  amount  of  imports  from 
Great  Britain  and  the  possible  concessions  to  the  United 
States  were  other  unfavorable  factors.* 

Since  the  iron  and  steel  industry  had  always  been  the 
Liberal  pet,  the  Government  would  probably  have  re- 
newed the  bounties  or  given  protection  but  for  the  vigor- 
ous and  organized  opposition  of  the  farmers,  the  dumping 
of  rails  in  England,  India,  and  Australia,  and  the  sj>read 
of  the  combination  movem*  tit.*  By  the  spring  of  !.910 
it  was  agreed  that  no  Iwunties  should  l>e  renewed  and 
that  those  on  wire  rods  should  not  be  jtaid  after  June  30, 
1911.' 

The  ending  of  the  bounty  system  v  as  sad  news  to  the 
manufacturers  of  iron  and  steel,  who  wanted  to  have  the 
bounties  on  wire  rods  renewed  for  at  least  a  year,  but  the 
political  tour  of  Sir  Wilfrid  Laurier,  Mr.  tielding,  and 
other  prominent  members  of  the  Gi»\'emment  through 
western  Caiiada  in  the  summer  of  1'  0  convinced  them 
that  their  decision  had  been  politically  sound.  The  infec- 
tion of  Reciprocity  resolutions  and  agreements  gave  pro- 
posals for  the  continuation  of  the  bounties  a  imal  death- 
blow, so  far  as  the  Liberal  Party  was  concerned. 


I 


>  Iron  Age,  vol.  lxxxii,  p.  1994. 

•  Jhid  ,  vnl  i.irsxTi,  p.  .W4. 

*  Debaie*.  1910,  p.  8S6S. 


»  Ilntl.,  vol.  LXXXV,  p.  266. 
*  Naiiott,  vol.  xn,  pp.  257^58. 


Pi 


u 


If 


H. 


134    THE  (  AXADIAN  IRON  AND  STEEL  INDUSTRY 

S  0  Probably  no  other  pJeoo  of  Canadian  commercial 
egislafon  w.us  ever  ac.-epted  with  .,0  httle  eritid.,r«^^Le 
>ounly  .sys.e,n  us  upplie.!  to  iron  ai.d  .st.vl.  AW  all 
interests  have  h.uded  ,' i.  ,.,.eral  s;  ,  ^^  ^Xa^ 
a..d  eonstruetiv.  ,K,Ii<y.  ..  di.stir.T  en^uraRement  to  th^ 
rec.,.,.,.t.s.  and  u  l.nefit  to  the  c-onaumers  ofTr^Tand  «tt 
produ.  t..    Parliamentary  discussion  centered   Zuit. 

able  S,r  Charles  Tup,>er  wanted  to  have  Newfoundland 
ore  treated  as  native  o.^.  George  Foster,  the  Ic^e  "f 
protcx-fonists  welcomed  Mr.  Fielding  into  Ihc  foW  The 
farmers  usually  unorganized,  were  not  taken  seriously 
J^ow  that  the  histoiy  of  the  bounty  system  has  Ln 
r^rded   .t  ,s  .„  plar^  to  estimate  the  value  and  wisdo  " 

can  l,e  done  at   h,.s  ,M,mt  .s  to  discuss  the  merits  of  boun- 
ties  as  opposed  to  duties.    If  protection  had  not  b^n 
afforded  m  the  form  of  tariff  dutL  and  bounUes  i^a^ 
Ls.  .f  bounties  alone  or  protective  duties  alone  had  been 
granted.  -  the  .ssue  wonid  ha  .  been  clear;  and  whatever 
system  exKsted  could  have  been  ucdy  discussed  on  its  ol^ 
men  s.  But  ever  since  the  introduct.un  of  the  boun  y  s^ 
tern  m  1883.  the  problem  has  never  been  so  simple    iTL 
quae  .mpossible  to  discuss  the  bounty  system  apari  from 
a  cons.derat.on  of  the  duties,  or  the  tariff  system  ap^ 
^om  the  bounties  -at  least,  so  far  as  the  w^om^ 
adopt.ng  a  protective  policy  is  concerned. 

It  IS  obv,ous  that  granting  bounties  is  a  practice  per- 

ta.n.ng  to  the  protective  policy,  and  no  one^holvo" 

tl>o  bounty  system  can  hide  beneath  the  free-trade  mantle 

The  fundamental  purpose  of  a  Uunty  system  and  of  pr^ 

tecfve  dut.es  is  identical;  na.nely.  the  temporary  on>e" 

manent  assistance  of  an  indust^^  under  alleged  and  rZ 

MMy  actual  disadvantages.   Whether  or  not  such  a  pol^y 

m  any  form  has  been  justified  by  Canadian  experien^i  I 

consideraton  which  must  !«.  r^     »  »        ^i^rieuce  is  a 

I- J  waicn  must  be  postponed,  pending  a  more 


In 


HISTORY  OF  TARIFF  \SD  BOINTY  SYSTEM    135 

detailed  discussion  of  the  development  of  the  Canadian 
industry. 

In  the  n»<  iin  time,  let  us  assume,  for  <»nvenienfe,  that 
a  i)rolective  policy  was  necessary  in  Canada  for  rf*as«>ns 
IKjlitical  or  economic,  whether  from  the  j)oint  of  view  of 
pure  exi)ediency  or  fundamental  economic  causes.  This 
has  been  the  assumption  on  which  have  procee<ied  lM)th 
the  Conservative  Party  and,  with  (lualifications,  the  Lib- 
erall'arty  in  Camula.  Meanwh;  ,  our  immediate  problem 
is  that  of  determining  the  relative  merits  of  duties  and 
bounties  as  a  protective  system. 

Both  parties,  as  we  have  seen,  were  confronted  with 
most  embarrassing  internal  diffirMilties  in  the  iron  and  steel 
schedule.  T'  e  nature  of  that  situation  scarcely  need  be 
rejjeated.  It  was  -  n  these  rocks  that  the  Conservative 
Party  found  it  fli  stranded  in  1896,  and  the  Liberal  Party 
very  shortly  alter  found  the  way  out  beset  with  serious 
dangers.  And  yet  the  channel  had  been  traver^d  bcfcjre. 
The  pilots  had  lieen  disqualified  by  the  election  of  1896, 
but  the beacm lights  wen-  set  to  ^^uide  the  re^ .-.  i.it\g  Li'x-al 

-   '    .   Thu-.  it 

*o  redure 

imouut 

.,  .'  exten- 


187S 


Party,  whici    'lad  not  been  ^n  power    ir. 
w  .8  that  whci,  it  seemed  desi.able  on  » 
the  protection  afforded  by  tariff  duties, 
of  protec'  ion  was  but  slightly  reduced  on 
sion  of  the  bounty  system  .     1897. 

.J  ist  as  it  was  a  mistiike  for  the  Conservative  Party  to 
raise  the  duty  on  scrap  iron  in  1894.  so,  too,  it  would  have 
been  a  political  blunder  had  the  Liberals  failed  to  reduce 
the  duties  on  iron  and  steel  in  1H'>7.  The  tiiaml  --turers, 
always  a  strong  and  influential  political  l)o<ly,  u .  t  elamor- 
iii;;  for  lower  duti<s  on  pig  iron,  and  steel  bilieta,  as  well  as 
on  scrap  iron.  Likewise,  the  duties  on  finished  products 
had  to  be  slightly  reiluced  if  the  farming  interests  wer-  to 
be  satisfied.  Thus,  ])olitical  necessity  as  well  as  econv>nr:c 
convictions  favored  the  downward  revision  of  the  custom 
tariff.    On  the  other  haiKl,  the  iron  and  steel  interest*;. 


Ij 


ill 
m 


156    THE  CAN.iDIAN  IRON  AND  STEEL  INDUSTRY 

which  had  suffered,  had  to  be  compensated  if  no  interest 
-as  to  be  ahcnuted  from  the  LiJ>eral  Party.  EeonoS 
the  movement  was  quite  sound  so  far  as  the  int^^d  a^' 
rangcments  of  a  protective  system  were  en  J^^^'cTj 
ardent  m  particular  favors  the  bounty  form  of  pro^ 
tion.  As  H^  have  seen.  Canada  has  been  and  is  a  lar^ 
consumer  of  .ron  and  steel  goods.  Between  1897  and  llu 

'  loTZ  rzTiT  ^'  r  '"^"  ^^  •— ^  f'- 

and  in  1910  th J  :  ^"^  '^^'  ^  y^'"' «'  ^^Pression. 

and  m  1910.  the  consumption  exceeded  900.000  tons  In 
«»e  calendar  year  1912.  the  total  Canadian  prTuction 
a^one  exceeded  1.000.000  tons..  The  cn^umption  of  steT 
which  .s  bemg  u.sed  in  the  manufacture  of  an  incLlTn' 
number  of  products,  has  no  doubt  increased  evT^ 
rapidly,  especially  in  .cent  years.  Tile  "^^eZsioTo" 

demand  for  wire  fencmg.  dependent  on  wire  rods    Like 
wise,  the  extension  of  railwav  milea-'e  has     vnK    l     i 
demand  for  bridgc-building  La:::;:X^'^X 
the  use  of  structural  steel  for  ^nildin,:  pan,o4Tis  an  h^' 
I^nt  source  of  the  demand  foi  the  .iJi^^lnZ  Z 

Had  customs  duties  instead  of  hoiin»;«=  k_ 

the  ph™  „,  ..^  i.„  ^„  J.  !J:js:,'^;„~ 

have  been  raised  to  sonic  degree    The  ..vfnnf  /      ,""J"7 

Ire:: :,  'z:^^^' ',- ""-  ""?'••>""  ■"  "-^  ™*:J 

of  United  ^LT        \         '     "^'  "P  "^  "^^'^^  in  the  hands 
dumping  „,  ,„,,.,  X\m:Z.     u,  "T.',  '"  '"•  ""'""' 

'  Sec  Appendix  B.  Tabic  1. 


;'i»«s?«'SM£ 


fflSTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    157 


to  1902  would  doubtless  have  aided  the  Canadian  producers 
to  the  extent  of  the  increase  in  prices,  plus  the  Canadian 
duty.  As  a  matter  of  fact,  it  was  just  this  advance  in 
prices  in  spite  of  the  lack  of  duties  that  was  one  of  the 
more  favorable  conditions  for  the  development  of  the  Ca- 
nadian industry  l)etween  1896  and  1902. 

If  Canada  had  been  a  large  exporter  of  iron  and  steel, 
the  result  might  ^-ave  been  otherwise,  but  when  a  nation 
becomes  an  importer,  or  so  long  as  a  country  imports  ar- 
ticles whether  or  not  they  are  produced  at  home,  the  tend- 
ency is  for  the  importing  country  to  pay  duties  in  the 
form  of  higher  prices.  The  ex]K>rter  pays  the  duty  only 
to  the  extent  that  producers  belonging  to  the  importing 
nation  meet  the  foreign  price,  plus  the  freight  rates,  and 
other  incidental  charges.  Ordinarily,  as  we  shall  see,  Ca- 
nadian producers  have  not  been  able  to  supply  the  total 
Canadian  demand  at  such  i)rices,  and  the  existence  of  the 
Canadian  duties  wouUl,  therefore,  have  been  a  great  bur- 

c on  the  Canadian  consumers  of  the  various  iron  and  steel 

products,  especially  jjig  iron  and  steel  billets. 

Bounties,  on  the  other  hand,  subsidize  the  home  pro- 
ducers, and  offset  a  part  of  the  costs  of  production.  C'on- 
sequently  goods  can  be  sold  at  prices  that  might  not  other- 
wise be  profitable.  Foreign  goods  are  admitted  fro*-  of  duty 
or  at  lower  rales  than  would  otherwi.sc  have  been  necessary, 
much  to  the  advantage  of  the  consumer.  Producers  bene- 
fit according  as  they  are  able  to  retain  the  bounties  and 
yet  compete  \vith  foreign  producers.  Home  production  is 
thus  made  posslI)le  without  an  increase  in  the  price  of  the 
product  to  the  manufacturing  consumer. 

Under  a  system  of  duties  the  (consumer  is  presumed  to 
pay  the  increase  of  pr"'?es  on  all  the  g  xxls  consumed;  under 
a  bounty  system  the  consumer  jniys  only  the  bounties  on 
that  part  of  the  goods  produced  within  the  country.  The 
consumers  of  other  imported  and  dutiable  giMxls  may  jjuy 
the  bounties  and  the  consumer  of  bountied  iron  and  steel 


'fl 


'3@%«^-^»«K^'«f^BK>^>«(L' 


■', 


ill' 


'1 


158    THE  a\NADIAN  IRON  AND  STEEL  INDUSTRY 

products  may  get  off.  for  the  greater  part,  unburdened 
In  such  crcumstancs.  a  bounty  system  is  obviously  piS-' 
eraWe  to  the  .mposUion  of  so-caJled  "adequate"  clslrL 

Another  advantage  in  the  bounty  system  is  the  fact  that 
s  rangely  enough,  it  digs  its  own  grave,  while  the  .^ipLnt 
of  the  bounties  are  content  to  have  the  system  buried.  A 
bounty  system  that  is  successful  (in  so  far  as  the  develop- 
ment of  an  mdustry  may  be  taken  as  a  mark  of  success) 
necessUates  the  e.xoenditure  of  a  direct  outlay  iZ^i 
1  reasury.  and  a't.  .,ugh  Mr.  Fielding  was  able  to  convince 
the  iron  and  steel  mterests.  including  the  manufacturing 
consumers  of  iron  and  steel,  that  the  bounties  had  l^n 
entirely  repa.d  by  an  increa^  in  the  collection  of  duties 
directly  resulting  from  the  development  of  the  iron  and 
steel  industry  he  found  it  increasingly  difficult  to  persuade 
he  general  public  of  this  fact.  Here  was  a  plausib^excul 

troia  1883  to  189o,  but  between  1895  and  1913,  $16,785  827 « 
was  paid:  enough  to  b.ild  an  iron  and  steel  plant'that 
would  pr,Hha.e  an  output  piobably  as  large  as  that  of  he 
Dominion  S led  Corporation,  and  far  more  than  enough 
to  pr..  uce  all  the  Government  purchases  of  iron  and  stS 
PHKiuc-ts  for  railway  and  other  pu^K^ses.  Such  an  ext^T 
diture  ..unnot  fail  to  excite  the  critical  observ.tio  IX" 
cussion  o.  those  who  do  not  favor  a  protective  pohVy 

Besides,  the  Injunty  system  was  admitttHily  a  ,,oli,T  of 
exiKHhcncy    temporarily  udoplcnl  and  subject  to  a  .iedinc 
of  rates.   Thus    the  Canadian  system  ...  Ii„al|y  alloJe" 
to  pa.ss  away  )K-tw.vn  1910  and  19h>.  at  a  time  when  public 
discussion  seenu-d  e.spw-ially  unfavorable  to  a  renewal. 

§  ;o    The  tarifT  bargain  of  19(Hi  rcpres.-nted  a  down- 
ward rxn-.sion  wilh  Ihv  .-x<rpti<„.  of  .luties  o,.  angles,  tees, 
etc.     Ihe  farmers  wer.-  .Iisap,«,inted  that  the  tariff  hml 
'  Sw  Appendix  E. 


fflSTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    169 

not  been  further  reduced,  yet  they  felt  that  they  had  prob- 
ably come  out  on  the  right  side  of  the  bargain.  Manufac- 
turing interests,  hcpbg  for  higher  protection,  were  even 
more  critical,  and  from  190G  to  the  present  time  have  made 
recurring  requests  for  higher  duties  on  several  iron  and 
steel  products.  But  few  changes  have  been  made.  In  1907 
and  1910  Mr.  Fielding  said  that  the  tariflf  was  working 
well,  and  that  nothing  would  be  done.'  In  l&ll,  the  agree- 
ment resulting  from  negotiations  for  reciprocity  with  the 
United  States  included  the  admission  of  wire  rods  free  of 
duty.  While  rods  were  at  that  time  on  the  free  list,  the 
iron  and  steel  interests  nevertheless  objected  to  the  inclu- 
sion of  wire  rods.  Such  a  treaty  would  have  made  the  in- 
crease of  duties  favoring  this  branch  of  the  industry  prac- 
tically impossible.  Consequently  the  iron  and  steel  peo{)le 
threw  their  influence  in  favor  of  the  Conservatives  who 
opposed  the  agreement. 

Encouraged  by  the  results  of  the  election  of  1911,  which 
placed  in  power  the  traditionally  high-protective  Conserv- 
ative Party,  the  iron  and  steel  people  immediately  pressed 
for  an  advance  in  duties  on  certain  iron  and  steel  ^nxxls. 
A  memorial,  presented  to  the  new  Finance  Minister,  Mr. 
W.  T.  White,  in  1912,  failed,  however,  to  move  him  from 
Mr.  Fielding's  policy  of  tariff  stability.  The  years  1912 
to  1914  trought  with  them  extraordinary  conditions.  As 
the  United  States  iron  and  steel  industry  had  been  in  a 
state  of  depression,  wire  rods  were  being  sold  in  Canada 
at  a  price  below  the  average  coat  of  production  in  Canada. 
Meanwhile  the  Dominion  Steel  C'-orporation  had  invested 
about  $1,000,000  in  a  rmi  mill  capable  of  producing  about 
100,000  tons  a  year,  and  the  Steel  Company  of  Canada 
had  built  a  $750,000  mill  capable  of  producing  al)out  75,000 
tons  a  year.  While  l)oth  of  these  mills  have  been  only  par- 
tially operated,  92,000  tons  of  the  annual  consumption  of 
150,000  to  200,000  tons  of  wire  rods  were  imported  into 
>  Iron  Age,  vol.  uuuuu,  p.  481. 


>»<h( 


Bl^a^ga 


leo    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

Canada  in  1913.  Consequently  the  two  companies  renewed 
their  appeals  for  tariff  revision,  finally  with  success. 

Small  makers  of  nails  in  Canada  objected  to  the  advance 
of  duties  on  wire  rods,  their  raw  materials.  Of  the  Cana- 
dian production  of  nails  (approximately  1,500,000  kegs  per 
annum)  about  17  per  cent  is  prmiuced  by  the  Dominion 
Steel  Corporation  and  its  ally,  the  Pender  Company  of 
St.  John;  52  per  cent  by  the  Steel  Company  of  Canada; 
and  about  30  per  cent  by  the  smaller  independent  nail- 
makers  in  Canada.  The  smaller  firms  justly  fear  that  tlie 
price  of  their  raw  material  will  be  advanced  by  the  larger 
companies;  there  is  no  doubt  of  this,  or  what  would  be  the 
advantage  of  the  duties  to  the  producers  of  wire  rods, 
which  are  used  largely  by  the  finishing  mills  of  the  large 
companies  themselves? 

The  Government  decided,  however,  that  the  desirability 
of  favormg  the  production  of  wire  rods  outweighs  the  ob- 
jections of  the  smaller  nail-makers,  especially  as  the  nail- 
makers  are  protected  by  a  duty  of  35  fx^r  cent.  Conse- 
quently, on  April  6, 1914,  the  tariff  was  revised  to  provide 
for  duties  on  wire  rods  as  follows:  $2.25  per  ton  under 
the  British  preference,  and  $3.50  under  the  intermediate 
and  general  tariffs.  The  duties  on  wire  nails  and  on  wire 
were  not  advanced. 

A  similar  situation  arose  in  another  direction.  The  AI- 
goma  Steel  Corporation  at  Sault  Ste.  Marie,  made  repre- 
sentations that  if  the  same  duties  were  imposed  on  mer- 
chant mill  products  weighing  over  35  pounds  per  yard,  as 
on  those  weighing  less,  the  company  would  be  able  to  ob- 
tain capital  for  the  erection  of  mills  capable  of  producing 
products  of  a  weight  of  120  pounds  per  lineal  yard.  The 
tariff  was,  accordingly,  revised  to  provide  for  a  duty  of 
$4.25  under  the  preference,  $6  under  the  intermediate 
tariff,  and  $7  under  the  general  tariff  on  rolled  iron  and 
steel  and  angles,  beams,  etc.,  weighing  less  than  120  pounds 
per  yard.  This  item  in  the  tariff  is  thus  supposed  to  be 


■es 


mSTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    101 

moderrized,  in  line  with  the  general  Canadian  tariff  policy 
of  moderate  protection.' 

Such  were  the  conditions  and  features  of  the  chief 
chiices  in  1914.  These  alterations  cover  the  items  around 
which  the  greater  part  of  the  discussion  has  centered  in 
recent  years.  Apparently  the  chief  requests  of  the  iron 
and  steel  people  have  been  met.  It  is  difficult,  however, 
to  predict  the  future  course  of  events.  The  iron  and  steel 
interests,  encouraged  by  this  success,  will  probably  ask  for 
an  advance  of  duties  on  the  primary  products,  pig  iron  and 
steel  billets.  Mr.  White  has  declared  himself  against  high 
duties  on  these  articles,  the  raw  materials  of  such  a  variety 
of  industries;  especially  as  an  advance  would  necessitate 
an  increase  of  duties  on  nearly  all  products  into  which  they 
enter  as  raw  material. 

>  Drbaitt,  19U,  pp.  «54»-48;  and  Memorandum  of  DejMrtmeni  of 
Cuilomt,  April  7. 1914. 


CHAPTER  Vin 

VARIOUS   FE.\TUKES  OF   TARIFF   AND   BOUNTY 
LEGISLATION 

§  1.  In  1896  the  Liberals  promised  that  if  they  were 
placed  in  power  duties  woulil  be  reduced.  The  general  re- 
duction on  most  articles  in  that  year  amounted  to  about  10 
I)er  cent  of  the  duties  in  force  l)efore  1890.  On  a  few  articles 
the  reduction  of  duties  was  j?reater;  as  much  as  40  per  cent 
on  i)ig  iron,  60  per  cent  on  steel  billets  and  infjots.  and  75 
per  wnt  on  wrought  .s'-rup  iron  and  steel.  Sirice  bounties 
were  granted  as  temporary  c«)iiipen.sjition  to  the  producers 
of  these  articles  on  whicrh  the  iini)ortant  reduction.",  were 
made,  the  jjrotlucers  were,  for  the  time  l)eing.  in  about  the 
same  .situation  as  l;  Tcre  {li<-  revision. 

A  new  kind  of  reduction  wjus  adopted  in  1890  in  the  form 
of  the  British  preference.  Under  the  Imperial  Acts  that 
applied  previous  to  1847,  gcxnls  from  the  United  Kingdom 
or  other  IJritish  pos,sessit)ns  were  udmitted  free  of  duty; 
and  after  the  repeul  of  the  Im|)crial  .Vet,  some  of  the  Prov- 
inces admitted  British  gmxls  at  spe<-iully  favorable  rates; 
but  this  prefer(>r«iHl  principle  had  long  since  disappeared 
from  Canadian  tariff-making.  When  the  tariff  was  revised 
in  1890.  and  the  preference  intrmhiced,  it  was  hailed  as  an 
entirely  new  invention,  much  to  tlie  credit  of  the  Lil)eral 
Party,  and  particularly,  of  Mr.  Fielding,  the  Finance  Min- 
ister. 

This  preference  section  prf)vided  that  when  the  customs 

tariff  of  any  country  admitted  the  products  of  Canada  on 

terms  as  fa\'i)rable  on  the  whole  as  tho.se  of  the  Canadian 

re-cij)ro<;al  tariff  •  articles,  the  growth,  pnxluce,  or  manu- 

'  S-t  iorth  in  S<hiitulr  I)  «f  the  (Hatouifi  Tariff  .\ct. 


VARIOUS  FEATURES  OF  LEGISLATION        163 

facture  of  such  country,  when  imported  direct,  might  enter 
Canada  at  reduced  rates.  Schedule  D  provided  that  on 
such  gmxis  the  duties  should  lie,  on  and  after  April  W,  1897, 
until  June  30,  1898,  seven  eighths  of  the  duty  mentioneil 
in  Schedule  A,  and  on  and  after  July  1,  1898,  three  quar- 
ters of  the  duty  mentioned  in  Schedule  A.'  This  applied 
particularly  to  the  products  of  Great  Britain.  In  1898  it 
was  explicitly  provided  that  the  articles  of  certain  countries, 
especially  the  United  Kingdom,  Bermuda,  the  British  West 
Indies,  and  British  Guiana,  when  imported  direct,  should  be 
entered  at  three  quarters  of  the  duties  mentioned  in  Sched- 
ule A,  provided  that  the  articles  admitted  were  bona  fide 
manufactures  of  such  country.*  In  1900  the  preference  was 
raised  to  one  third  of  the  duties  set  forth  in  Schedule  A.* 

In  1906  the  British  preference  was  made  even  more  ex- 
plicit, inasmuch  as  definite  rates  of  duty  were  imposed  on 
individual  articles.  In  the  adoption  of  multiples  of  2i 
per  cent,  as  15.  17i,  or  20  per  cent,  the  lower  rate  was  al- 
ways  taken.  If,  for  instance,  the  33j  per  cent  reduction 
provided  for  a  duty  lietween  15  and  17i  per  cent,  the  ar- 
ticle was  taxed  15  per  cent.  Thus,  the  revision  of  1907 
tended  to  favor  the  British  exporter  even  more  than  before. 
To  l)e  admitte^l  under  this  tariff,  it  was  also  provided  that 
a  substantial  part  of  the  value  of  the  manufactured  article 
must  have  l)ec  i  produced  by  labor  in  one  or  more  of  the 
almvc-mentioned  countries.* 

Many  have  chiimed  that  the  value  of  the  preference  to 
Britisli  manufacturers  has  been  small.  The  duties  on  iron 
and  steel,  especially  on  the  primary  products,  on  which 
bounties  have  been  paid,  were  greatly  retiuced  in  1896,  and 
the  actual  preference  wjis  not  very  great,  since  the  prefer- 
ential rates  were  estimated  on  the  basis  of  the  low  rates 
in  the  general  tariff.  (>f  ctmrse  there  can  be  no  preference 
on  free  go<Kls.  One  third  of  $4.50  for  pig  iron,  or  $2  for 


>  WMU  Vir. 
»  G3-W  Vic 


IH07,  rhap.  16. 
189»,  cL  -.p.  la. 


•  fll  Vic.  1897,  chap.  37. 

*  0-7  Ed.  VII.  1906-07.  chap.  11. 


t     k 


M 


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i 


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164    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

steel  billets,  is  a  small  preference.  Under  existing  circum- 
stances British  manufacturt'fs  have  been  unable  to  grasp  the 
surplus  Canadian  market  Itecause  they  have  been  greatly 
lmmiM?red  by  American  competition.  In  spite  of  this,  many 
Canadian  manufacturt^rs  claim  that  the  British  preference 
rates  are  an  insufficient '  protection  and  are  anxious  to 
have  the  preference  alwlished.- 

It  was  hojwd  that  the  preference  would  stimulate  im- 
portation from  Great  Britain,  or  that  British  merchants 
would  be  able  to  get  and  keep  a  larger  share  of  the  trade 
supplied  by  Canada's  imports,  especially  impoT\s  of  iron 
and  steel.   Imports  of  dutiable  iron  and  steel  goods  aver- 
aged slightly  over  $3,000,000  from  Great  Britain  and  about 
$3,300,000  from  the  United  States  for  the  years  1876  to 
1H80.  In  the  later  eighties  annual  imports  fnjin  Great  Bri- 
tain exceeded  those  from  the  United  States  by  about  $200,- 
(K)0,  but  the  first  seven  years  of  the  nineties  saw  a  rapid 
advance  in  the  excess  of  imports  from  the  United  States 
over  those  from  Great  Britain,  resulting  largely  from  a  de- 
cline in  the  imports  from  (ireat  Britain,  although  partly 
from  an  increase  in  imports  from  the  United  States. 

The  preference  was  exi)ected  to  change  this  situation, 
but  it  failed  to  accomplish  its  purpose.  For  the  period  1895 
to  1899  imiKirts  of  dutiable  iron  and  steel  goods  from 
Great  Britain  averaged  nnnually  about  $2,100,000,  as  com- 
pared with  an  average  of  $8,000,000  from  the  United 
States.  Dutiable  imports  from  the  United  States  exceeded 
those  from  Great  Britain  by  about  $11,000,000  in  1899. 
Smoe  1899,  when  the  preference  was  increased,  tho  excess 
of  dutiable  goods  from  the  United  States  hai  increase.! 
regularly.  The  British  proportion  of  total  imports  of  djli- 
able  goods  decreased,  from  an  average  of  aljout  18  per  cent 
for  the  years  1899  U>  1910,  to  12  per  cent  for  the  period 
1911  to  1913.* 


'  Monetary  Timen,  vol.  xL,  p.  840. 
•  See  Appendix  G,  Table  II. 


•  Iron  Age,  vol.  lxx,  p.  «0. 


■SfflBi 


VARIOUS  FEATURES  OF  LEGISLATION        184 

It  is  more  diflBcult  to  determine  what  part  of  the  im- 
ports from  Great  BriUin  would  have  been  impossible  with- 
out the  preference.  The  greater  part  of  the  British  imports 
is  composed  of  free  goods,  and  those  articles  on  which  the 
general  duties  are  low  and  on  which  bounties  have  been 
paid.    On  the  average  about  half  of  the  free  goods  have 
come  from  Great  Britain.  Whereas,  in  191S.  one  tenth  of 
the  dutiable  goods  came  from  Great  Britain,  nearly  one 
third  of  the  free  goods  were  of  British  origin.    Pig  iron,  on 
which  the  preference  is  only  $1  per  ton,  has  been  imported 
from  England  in  values  amounting  to  $376,313  in  1909,  and 
$>2,0t;2,608  in  1908,  as  compared  with  imports  of  $491,529 
and  $1,429,946  from  the  United  States  for  the  sanie  years. 
Pig  iron,  which  makes  good  ballast  for  transatlantic  ships, 
can  lie  carried  at  very  low  rates.  The  next  largest  item  is 
galvanized  iron  sheets,  on  which  the  preference  k  5  per 
oml.  Imi)orts  to  the  value  of  $1,389,343  were  received  in 
1012.  Iron  au.l  st-n-l  rails,  on  which  the  preference  amounts 
to  $2.;J0  per  ten.  htve  not  been  largely  imported  from 
(;reat  '/.ntain.'    Yet,  Mr.  James  Farrell,  president  of  the 
1  >;ited  States  Steel  Corporation,  claims  that  the  preference 
^'its  we'!  mS'>  the  profits  on  rails  sold  in  Canada.* 

Iinpo  I J  fr.>  H  (he  United  States  have  taken  the  form  of 
bar  iron  and  steel,  angles,  beams,  rails,  skelp  iron  and  steel, 
plales.  and  wire:  — artiries  on  which  the  duties  are  rela- 
tively high  and  the  p  /eference  large.  The  actual  amount  of 
importation  depends  l!\  part  on  the  character  of  the  ar- 
ticles and  the  freight  charges  paid  on  them.  Since  struc- 
tural material,  rails,  etc.,  can  be  carried  cheaply  by  rail, 
American  producers  secure  the  larger  part  of  the  trade. 
Specialization  in  certain  branches  has  undoubtedly  fa- 
vored the  imporl  vion  of  many  American  iron  and  steel 
products. 
While  the  American  industry  has  prospered  and  devel- 

»  Canada  Vear-Book,  1912,  p.  183. 
'  Monetary  Timet,  vol.  U,  p.  534. 


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IM    THE  rWADlAN  IRON  AND  STLEL  PsDUSTRV 

oped  during  the  last  twenty  M.rs.  Great  Britain  has  been 
tryinR  to  leam  the  cause  of  her  loss  of  supremu.  v.  Both 
the  United  States  and  (J.  many  lead  Great  Britain  in  the 
pnxlu.-tion  of  pig  iron.  TUt-  rnit«l  States  h-ads  the  world 
in  plant  organization  and  in  the  use  of  nuiHiin'-rj  >n  a 
large  scale.  (\>n.sefiuently.  the  preference  has  been  less 
valuable  to  tl.»^  British  producer  than  it  mi«ht  have  been 
had  British  superiority  in  iron  and  steel  production  uu- 
tinued  down  to  date. 

The  value  of  the  preference  to  Canadian  consumer  <  of 
iron  and  steel  is  u  different,  yet  related,  question.   British 
iron  goods  that  do  not  compete  with  either  American  or 
Canadian  made  go-nls  (a  very  small  vol  urn. )  may  co.st  the 
consumer  less  than  they  would  otherwise.    Even  if  the 
British  producer  is  in  a  strategic  jmsition,  he  can  afford  to 
sell  a  larger  quantity  of  goc^is  at  a  somewhat  lower  price. 
The  preference  on  gcKnls  that  nujst  comi)ete  with  Canadiaii 
or  American  products  is  more  apt  to  l)e  effw:tive.  In  such 
cases  as  these,  much  dci)ends  on  the  standing  of  the  Bri- 
tish  producer.    If  he  is  as  efficient  as  his  comi)ctitor3  else- 
where,  he  will  ex])ort  to  Canada  at  a  i)ri(x;  lower  than  the 
Canadian  consumer  would  other\s  ise  have  to  i)ay,  and  the 
consumer  will  benefit  to  the  extent  of  the  preference  on  his 
total  con.sumption.    If  the  i)referencc  simi)ly  i»iitralizes 
British  disadvantages,  the   British  j.roducer  will  absorb 
the  preference  to  such  extent  as  he  can  gain  the  Canadian 
market.    The  (  anadian  consumer  does  not  gain  in  situa- 
tions like  these  and  the  Canmlian  or  American  producer 
loses  that  porticn  <,f  the  market  that  the  British  producers 
are  able  to  sei^e.  The  Canadian  consumer  lienefits  not  so 
much  fro!u  the  actual  amount  of  British  goo<ls  imported 
as  by  the  fa<-t  that  the  possibility  of  obtaining  a  supply  in 
Great  Bntuia  for.-cs  domestic  and  Ameri«iu  prcnlucers  to 
reduce-  j.n.vs  to  meet  the  po.ssible  or  actual  i/aportation  of 
l.Mti:ih  g(xKls  under  the  preference.    Actual  imiK)rtation 
of  a  considerable  value  of  British  goods  is  evidence  that 


VARIOUS  FEATLRES  OF  LEC.ISLATION 


167 


the  force  of  competition  is  in  operation.  In  no  owe  an  the 
preference  increiuie  the  cost  of  iron  an.l  steel  goods  to  oon- 
suinor..  The  Cunailiim  prcHliut-r  lo«.s  in  so  far  as  he  fails 
tc.  hold  the  Canmlian  market,  and  he  loses  still  more  when 
the  Side  price  to  the  consumer  h  reduced.  The  consumer 
pains,  not  only  on  British  imports,  but  also  on  domestic 
and  other  foreign  products. 

§  2.  The  internal  difficulties  with  the  iron  and  steel 
schedule  were  really  at  the  basis  of  the  revisions  of  1897 
and  1907.  especially  that  of  1897.    It  is  ju^t  this  feature  m 
the  proteaive  system  that  gives  most  difficulty,  and  in 
some  cases  secures  the  supi)ort  of  manufactunng  mterests 
for  what  may  appear  to  be  a  downward  revision  of  the 
tariff.   Indeed,  the  .addition  to  the  free  list  of  articles  not 
produced  in  the  country  may  be  regarded  as  «  »'>K"^'»»  f*^*" 
ture  of  the  protective  system.    In  a  scheme  of  this  kind, 
however,  the  protective  system  could  not  be  logically 
worked  out  in  all  its  phases;  since  the  entry  of  the  raw 
materials  of  certain  manufacturing  interests  free  of  duty 
is  a  contra.liction  of  the  principle  of  encouraging  mfant 

industries.  .....  »« 

At  all  events,  the  principle  of  admitting  the  raw  mate- 
rials of  certain  manufactures  at  low  rates  of  duty  has 
been  fully  worked  out  in  Canada  since  1890.    This  ap- 
peared  in  the  revision  of  1897  in  the  form  of  the  reduction 
of  the  rates  of  duty  on  pig  iron  and  steel,  the  raw  mate- 
rials  of  a  large  body  of  manufacturing  interests;  and  also 
in  the  admission  of  certain  articles  free  of  duty,  when 
used  in  Canadian  factories  in  the  nmnufacture  of  certain 
products.    In  a  more  special  form,  the  principle  was  em- 
bodied in  what  has  been  culled  the  drawback  system,  by 
which  duties  on  specified  commo<lities  imported  and  used 
in  the  manufacture  of  certain  articles  were  almost  wholly 
rebated  to  the  importer  of  such  raw  materials. 

In  1907  rolled  iron  and  steel  and  i)ig  iron,  when  used  in 


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168    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

the  manufacture  of  agricultural  implements  to  be  exported 
from  Canada;  steel  under  one-half  inch  in  diameter  or 
under  one-half  inch  square,  when  used  in  the  manufacture 
of  locks  and  Knobs;  steel,  cut  to  shape,  when  used  in  the 
manufacture  of  spoons;  flat  spring  steel,  steel  billets,  and 
steel  axle  bars  used  in  the  manufacture  of  springs  and  axles, 
other  than  for  railway  and  tramway  vehicles;  spiral  spring 
steel  used  in  the  manufacture  of  railway  spiral  springs; 
steel  used  in  the  manufacture  of  cutlery,  files,  augers,  bits, 
braces,  hammers,  axes,  hatchets,  scythes,  reaping  hooks, 
hoes,  hay  and  straw  knives,  agricultural  forks,  rakes,  skates, 
stove  trimmings,  bicycle  chains,  and  windmills;  rolled 
angles  of  iron  and  steel  of  specified  size  used  in  the  manu- 
facture of  bedsteads,  lap-welded  tubmg,  and  bituminous 
coal  imported  by  proprietors  of  smelting  works  and  con- 
verted into  coke  for  the  smelting  of  ores,  were  given  draw- 
backs of  99  per  cent  of  the  duty  paid.'  In  1914  the  Con- 
servative Government  provided  for  a  drawback  of  99  per 
cent  of  the  duty  on  wire  rods  to  be  used  in  the  manufacture 
of  galvanized  iron  and  steel  wire,  numbers  9,  12,  and  13, 
and  on  charcoal  for  use  in  smelting  metals.* 

It  has  generally  been  argued  that  these  rebates  are 
detrimental  to  the  Canadian  iron  industry,  especially  in 
times  of  depression.  Canadian  material  cannot  be  used 
unless  it  is  marketed  at  rates  low  enough  to  meet  foreign 
competitors  in  the  open  market.'  A  claim  has  been  made 
that  scores  of  orders  for  Canadian  iron  were  canceled  in 
1906,*  and  that  these  rebates  accounted  for  a  good  share 
of  the  imports  of  iron  and  steel  products.^  The  iron  and 
steel  men  held  that  15  to  20  per  cent  of  the  iron  and  steel 
products  would  be  displaced  by  American  and  British  iron.' 

»  6-7  Ed.  VII,  1906-07,  chap.  11,  Schedule  B. 

•  Canadian  Mining  Review,  vol.  xlv,  1893,  p.  4. 

•  Department  of  Customs,  Memorandum,  Tariff  Changes  in  Effect, 
April  7,  1914. 

•  Iron  Age,  vol.  lxxviii,  p.  1632. 

'  Hardware  and  Metal,  vol.  xxii,  Jan.  8,  p.  29. 
'  Iron  Age,  vol.  Lxxviii,  p.  1632. 


if  ■ 

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VARIOUS  FEATURES  OF  LEGISLATION        169 

An  interesting  feature  appeared  in  1900  when  the  Ameri- 
can iron  tubing  firms  were  dumping  their  surplus  product 
into  Canada.  Imports  from  the  Stales  had  been  heavy  for 
some  time  and  low  prices  prevailed.  The  Canadian  produc- 
ers solved  the  difficulty  by  buying  up  the  pipe  offered  at  sac- 
rifice prices,  by  turning  a  different  thread  on  American 
pipes,  and  by  exporting  the  piping  to  Great  Britain.  Thus, 
the  99  per  cent  drawback  on  the  exported  product  was 
earned,  and  at  the  same  time  a  nice  profit  was  made  on  the 
British  sales,  and  the  price  in  the  home  market  maintained.  ^ 
The  discussion  of  this  drawback  system  is  interesting  and 
important.   A  memorial  presented  by  the  Canadian  iron 
and  steel  interests  in  November,  1911,  to  Mr.  White,  the 
Minister  of  Finance,  contains  the  following  statements  in 
respect  to  imports  for  the  fiscal  year  ending  March  31, 
1911:  "Of  imports  of  pig  iron  amounting  to  270,102  tons 
valued  at  $3,613,931,  151,349  tons  valued  at  $2,084,729, 
came  from  the  United  States.  It  is  estimated  that  nearly 
one  half  of  the  quantity  imported  from  the  United  States 
was  used  in  the  manufacture  of  articles,  which  under 
Schedule  B  of  the  Customs  Tariff,  obtained  a  rebate  of  99 
per  cent  of  the  duty."   "Of  imports  of  bar  iron  or  steel 
amounting  to  104,895  tons,  valued  at  $3,179,921,  84,650 
tons  valued  at  $2,533,747  came  from  the  United  States, 
quite  one  half  of  which,  having  been  used  in  the  manu- 
facture of  articles  named  in  Schedule  B,  obtained  a  rebate 
of  99  per  cent  of  the  duty." «  These  statements  were  the 
basis  of  a  very  definite  claim  for  higher  duties.  The  draw- 
backs were  discussed  again  in  1913.   It  has  been  claimed 
that  the  exporting  manufacturers  find  it  impracticable  to 
keep  foreign  and  domestic  pig  iron  separate,  so  only  foreign 
pig  iron  is  used  in  the  article  exported,  and  domestic  pig 
iron  in  the  article  for  home  consumption.  A  manufacturer 
of  agricultural  implements  might  import  10,000  tons  of 
pig  iron  and  use  20,000  tons  of  domestic  iron.  On  exporting 
»  Iron  Age,  vol.  utvi,  Dec.  «7.  p.  15.  '  Sec  Appendix  J. 


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170    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

10,000  tons  of  implements,  he  would  receive  a  drawback  of 
the  duty  on  one  third  of  the  10,000  tons  imported,  instead 
of  all  the  duty,  as  was  intended.  Consequently,  the  manu- 
facturers have  got  into  the  habit  of  buying  nearly  all  their 
pig  iron  abroad,  and  the  pig  iron  industry  has  suffered. 
For  this  reason,  the  wording  of  the  Customs  Act  has  been 
changed  to  provide  that  drawbacks  shall  be  payable  on  all 
pig  iron,  imported  and  used  by  the  manufacturer  in  the 
production  of  certain  goods,  in  the  proportion  of  the 
amount  exported  to  the  total  amoimt  produced.  ^ 

Canadian  iron  and  steel  interests  can  hardly  object  to 
this  form  of  tariff  reduction.   When  the  manufacturers  of 
agricultural  implements  have  to  bear  the  burden  of  most  of 
the  adverse  criticism  c*  protection  in  order  that  other  man- 
ufacturers may  retain  their  protection,  it  is  only  fair  that 
they  should  be  able  to  secure  their  raw  materials  as  cheaply 
as  possible.  The  iron  and  steel  industry  was  favored  by  the 
same  principle  in  1907  when  coal  employed  for  making  coke 
to  be  used  for  smelting  ores  was  admitted  to  the  99  per 
cent  rebate  list.  Manufactiu^rs  would  have  us  believe  that 
the  basis  on  which  to  judge  the  tariff  policy  of  a  country  is 
the  interest  of  each  particular  group.    But  commercial 
policies  are  not  so  simple.  The  drawback  system  is  only 
additional  evidence  of  the  difficulties  that  arise  from  the 
necessarily  illogical  application  of  the  protective  principle. 
The  revision  of  1914  has,  however,  given  the  Canadian 
producers  of  pig  iron  a  better  opportunity  to  share  in  the 
Canadian  market. 

§  3.  If  tariff  reductions,  the  British  preference,  and  the 
drawback  system  did  represent  a  loss  to  the  producers  of 
primary  products,  measures  other  than  Federal  offered 
some  compensation.  For  instance,  in  1895,  municipal 
bonuses  had  been  given  in  favor  of  the  estabhshment  of 

»  Debates,  19U,  pp.  25,  4C-50;  Memorandum  of  Department  of  Cus- 
toms, April  7. 


VARIOUS  FEATURES  OF  LEGISLATION        171 

the  iron  and  steel  plant  at  Hamilton.  When,  in  1900,  the 
Canada  Iron  Furnace  Company  installed  its  furnace  at 
Midland,  the  municipality  gave  a  bonus  of  $50,000  and 
exemption  from  aU  but  nominal  municipal  taxation.^   In 
1902  North  Sydney  offered  the  Nova  Scotia  Steel  Company 
a  bonus  of  $50,000  and  exemption  from  local  taxation  for 
20  years.2   In  1906  BeUeville  attracted  the  Ul-fated  Abbot 
Iron  Worlis  by  a  liberal  municipal  subsidy.   Sydney  was 
considering  in  the  same  year  a  proposal  to  estabUsh  there 
an  industry  to  manufacture  bar  steel,  angle  bars,  etc.^  The 
town  was  requested  to  give  a  bonus  of  $50,000  in  4|  per 
cent,  30-year  city  bonds,  a  20-year  tax  exemption,  and 
water  at  a  maximum  rate  of  3  cents  per  1000  gallons.  It 
offered  $30,000  and  a  20-year  tax  exemption.    St.  John 
offered  $50,000,  and  a  20-year  tax  exemption,  free  water, 
free  site,  and  a  $25,000  subscription  to  capital,  —  and  got 
the  industry.  Port  Arthur  is  practicaUy  a  partner  of  the 
Atikokan  Iron  Company,  by  virtue  of  stock  subscript  )ns, 
bond  purchases,  guaranties,  free  site,  and  tax  limitations.' 
The  Dominion  Iron  and  Steel  Company  received  from  Syd- 
ney adequate  support  in  the  form  of  bonuses,  free  site, 
and  tax  exemptions.   In  1904  Collingwood  gave  as  much 
as  $60,000  to  the  Cramp  Steel  Company,*  which  subse- 
quently failed.  •  •     i 
This  is,  of  course,  simply  a  part  of  the  general  mumcipal 
subsidizing  of  industries,  a  prevalent  evU  among  Canadian 
municipalities.  The  companies  are  aware  of  the  situation 
and  virtuaUy  hold  up  the  towns  and  smaUer  cities  for  sup- 
port, threatening  otherwise  to  build  at  some  rival  city.  The 
iron  and  steel  industry  has  shared  the  fruits  along  with  the 
rest.  The  policy  has  Uttle  or  no  direct  influence  in  the  de- 
velopment of  industry.  Even  the  location  of  an  industry-  is 
frequently  determined  by  quite  different  and  more  funda- 

>  E.  Porritt,  The  Revolt  in  Canada,  p.  IIC. 

i  Monetary  Times,  \o\.  XXXV,  II.  S4ii.  ,.^,     .        .. 

•  Iron  Age.  vol.  Lxxviii.  p.  1857.  *  4  Ed.  VII,  1904.  chap.  44. 


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172    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

mental  considerations,  such  as  the  existence  of  transporta- 
tion facilities  and  proximity  to  the  market. 

§  4.  The  Provinces  also  have  taken  a  hand  in  encourag- 
ing the  development  of  the  iron  and  steel  industry.    In 
1897  Ontario  passed  an  act  to  encour^t    he  manufacture 
of  railway  iron  and  steel  by  providii^  that  Ontario  might 
deliver  to  the  companies,  in  lieu  of  a  cash  subsidy,  railway 
iron  or  steel  manufactured  in  Ontario  from  iron  ore  of 
which  two  thirds  had  been  obtained  from  Ontario  mines. 
It  was  also  provided  that  subsidies  granted  to  certam  rail- 
ways should  be  subject  to  the  fu.  cher  condition  that  the 
companies  should  so  far  as  practicable  construct,  equip, 
and  operate  their  lines  of  railway  with  railway  supplies 
and  rolling  stock  of  Canadian  manufacture,  whenever  such 
supphes  could  be  procured  as  cheaply  and  upon  as  good 
terms  in  Canada  as  elsewher    i    Ontario's  Iron  Mining 
Fund  was  completely  exhausted  by  1904,  and  as  no  pro- 
vision  was  made  for  its  extension,  it  is  now  a  thing  of  the 
past.2   Ontario  also  passed  laws  providing  that  munici- 
palities might  subsidize  iron  and  other  smelting  works, 
rolling  mills,  and  ironworks  withm  or  adjacent  to  the  limits 
of  the  municipality  or  exempt  them  from  taxation  for  a 
period  not  longer  than  twenty  years.*   After  the  collapse 
of  the  Consolidated  Lake  Superior  Company  in  1903,  the 
Ontario  Government  undertook  to  guarantee  the  payment 
of  wages  due  the  employees,  including  high-salaried  offi- 
cials. Payment  was  made  from  local  banks  under  the  guar- 
anty of  the  Government,  which  held  security  for  the  repay- 
ment in  an  already  earned  but  not  conveyed  land  subsidy 
to  the  Algoma  Central  Railway,  one  of  the  subsidia- 
In  1904  an  act  was  passed  to  give  a  railway  bonus  to 


nes.^ 


>  CO  Vic,  1897,  chap.  iO. 

*  Ontario,  RepoH  of  the  Bureau  of  Mines,  1908,  p.  194. 

*  63  Vic.  1899,  chap.  33,  sec  44. 

*  Camdian  Annual  Review.  1904,  p.  2689;  4  Ed.  VII.  1904,  chap.  191. 


VARIOUS  FEATURES  OF  LEGISLATION        17S 

the  Grand  Trunk  Pacific,  if  the  rails  used  in  the  Ontario 
section  were  produced  in  Ontario,  or,  if  they  were  not  ob- 
tainable in  Ontario,  in  some  other  Canadian  Province.^ 

Nor  was  Nova  Scotia  less  generous,  especially  in  regard 

to  the  Dominion  Iron  and  Steel  Company.   In  1899  the 

promoters  of  the  company  secured  a  charter  by  which  the 

company  was  given  the  right  of  eminent  domam,  and 

given  the  power  to  pay  dividends  on  preferred  stock  while 

the  plant  at  Sydney  was  under  construction,  and  it  was 

freed  from  aU  provincial  and  county  taxation.  The  law  of 

Nova  Scotia  was  relaxed  to  make  it  legal  for  non-Bntish 

subjects  to  become  directors.    A  law  was  passed  to  the 

effect  that  a  du«ctor  should  not  be  disqualified  from  con- 

tracting  with  the  company,  so  that  the  promoters  of  the 

Dominion  Iron  and  Steel  Company  could  make  contracts 

with  the  Dominion  Coal  Company  for  its  fuel;  and  finaUy, 

the  city  of  Sydney  was  given  power  to  grant  a  bonus  and 

free  the  plant  from  municipal  taxation. 

In  the  same  year  the  Mining  Code  was  amended  to  pro- 
vide that  the  royalty  payable  to  the  Provmcial  Treasury 
on  all  coal  mined  and  used  in  the  manufacture  of  iron  and 
steel  in  Nova  Scotia,  or  by  steamers  owned  or  chartered  by 
the  company  for  conveyance  of  ores  or  the  products  of  the 
plant,  should  be  6|  cents,  instead  of  12|  cents,  per  ton. 
which  was  the  royalty  paid  on  coal  mined  for  export  or  for 
other  domestic  purposes. 

§  5.  The  Federal  Government,  too,  had  recourse  to  other 
forms  of  assistance.  In  1900  Mr.  Clergue,  of  the  Algoma 
Steel  Company,  urged  on  the  Government  an  amendment 
of  the  Bailway  Code  that  would  call  for  the  use  of  equip- 
ment mad.  in  Canada  on  railways  to  which  Dominion  sub- 
sidies were  paid.*  As  a  result  the  Railway  Act  was  amended 

1  4  Ed.  VII,  1904,  chap.  18,  sees.  5  and  9.  ,„    ,  ^      ■ 

«  Montreal  Star.  April  27. 1910;  E.  Porritt.  Sixty  Years  of  Proteettm  tn 
Canada,  p.  399. 


t 


.ir^ 


IV 


1  ■ !  ■ 


174    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

to  the  effect  that  when  the  Dominion  subsidies  were  be- 
stowed on  a  railway  undertaking,  the  company  should  lay 
its  road  with  new  steel  rails  made  in  Canada,  if  the  same 
were  procurable  upon  terms  as  favorable  as  other  rails.  * 
This  is  a  lenient  regulation,  but  it  represents  the  attitude  of 
the  Govermnent  toward  the  iron  and  steel  industry.  It 
has  also  been  claimed  that  iron  and  steel  shipped  over  the 
Intercolonial  Railway,^  has  been  charged  specially  low 
freight  rates,  and  that  the  Government  lof  "^1  on  every 
ton  of  iron  and  steel  shipped  from  Sydnej        ,iontreal.» 

§  6.  A  still  more  extraordinary  form  of  assistance  was 
given  in  1900.  The  Government  felt  restrained  by  its 
strong  free-trade  declarations  from  givii^  more  protection 
in  the  .  )rm  of  duties.  But  one  month  before  the  election  of 
1900  the  Government  entered  into  a  large  contract  with 
the  Algoma  Steel  Company  for  125,000  tons  of  first  quality 
"  nickel  steel "  rails,  25,000  to  be  taken  yearly  for  five  years. 
For  the  first  year  the  price  was  to  be  fixed  by  the  market 
price  in  England. 

This  "Clergue"  contract  was  severely  criticized  by  the 
Conservative  Opposition.  Since  nickel  steel  rails  were  not 
made  in  England,  regulation  of  the  price  according  to  the 
English  market  price  meant  nothing.  It  was  pointed  out 
that  no  tender  was  let  for  the  contract,  and  that  it  was 
impossible  to  estimate  actual  market  prices  from  journal 
prices.*  Furthermore,  the  price  might  be  fixed  for  one 
whole  year,  at  a  time  when  the  price  was  high,  and  the 
market  price  might  fall  soon  after,  as  it  did  in  1900,  from 
$35  to  $26  within  six  months.*  The  contract  was  not  gen- 
erally applicable  to  all  iron  and  steel  plants,  so  it  did  not 
foster  the  industry.®  The  government  was  already  paying 
bounties  of  $3  a  ton  on  steel  and  $3  a  ton  on  pig  iron.  These 


»  63-64  Vic,  1900,  chap.  58. 
«  Ibid.,  April  27. 1907. 
'  Jhid.,  p.  2740. 


»  Debates,  April  23.  1907. 
*  Ibid.,  1901,  pp.  2719-21. 
6  Ibid.,  p.  8571. 


"«r  '^^tsse;ft^iJi^:;m*s-"rM>y. .  V'£ ' '.  jf-y 


VARIOUS  FEATURES  OF  LEGISLATION        175 

bour.ties,  plus  $7  a  ton  on  sieel  rails,  were  no  doubt  a  good 
ba=:s  on  which  to  raise  capital  and  capitalization. »  In  fact, 
Clergue  did  make  use  of  the  contract  to  help  raise  momy.' 
Strangely  enough,  the  contract  did  not  expUcitly  provide 
for  the  manufacture  of  rails  in  Canada,'  aud  it  did  not 
siiecify  the  quantity  of  nickel  to  be  contained  in  the  new 
nickel  steel  rails  to  be  provided  at  such  prices* 

In  reply  to  these  criticisms,  Mr.  Blair,  Minister  of  Rail- 
ways, told  the  House  that  the  contract  had  been  made  to 
stimulate  another  stage  m  the  manufacture  of  iron  and 
steel.   Considering  the  statistics  of  railway  iron  unports, 
he  thought  it  well  worth  whUe  to  establish  a  rail  industiy 
iu  Canada.*  He  pointed  out,  m  addition,  that  a  domestic 
raU  miU  would  provide  for  quick  orders  for  rails,  which 
otherwise  would  have  to  be  purchased  from  abroad  at  pro- 
ducers' terms."    Mr.  Blair  did  not  doubt  Mr.  Clergue  s 
abiUty  to  carry  out  the  contract  on  time.^  English  quota- 
tions were  taken  for  the  price  of  rails  because  American 
quotations  would  otherwise  be  made  to  ruin  the  new  Cana- 
dian firm,  and  Mr.  Blair  thought  the  industry  should 
be  assurefi  that  it  need  not  face  unfair  and  destructive 

competH'rin.*  ,     .„  ,    , 

Bu*  •  -  -le,  1904,  before  the  rail  mill  was  regularly 

in  ope-  ~^ult  Ste.  Marie,  Ontario,  and  in  the  mean 

time,  *hc  .o^e^nment  was  saved  over  $100,000  in  1901 
owing  to  Clergue's  inabiUty  to  ship.'  Hence  the  raU  con- 
tract,  while  it  did  assist  m  the  sky-rocket  financing  of  the 
CnasoUdated  Lake  Superior  Company,  was  no  great  bur- 
den  to  the  Dominion. 

§  7  A  more  definite  form  of  assistance  was  finally  given 
the  production  of  steel  rails.  In  1904  the  steel  rail  miUs  of 
the  Algoma  Steel  Company  at  the  "Soo"  and  at  Sydney 


»  Debates,  1901,  p.  27i!l. 
*  Ibid.,  pp.  4631-33. 
»  Ibid.,  p.  3646. 


»  Ibid.,  p.  S637. 
»  Ibid.,  p.  8795. 
»  Ibid.,  p.  3546. 


»  Ibid.,  p.  3588. 

•  Ibid.,  p.  3547. 

•  Ibid.,  p.  3791. 


I 

■  r. 

i 

i 
s 


11 


-»-  4-j-    ilk? 


il 


Mi 


,  176    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

were  put  in  operation,  and  in  the  meun  time  agitation  for 
some  form  of  protection  had  been  successful. 

Some  regarded  the  protection  of  the  steel  rail  industry  as 
almost  a  natural  consequence  of  the  Jrberal  assistance  given 
to  the  manufacture  of  primary  products.  It  was  held  that 
as  there  was  no  special  inducement  to  convert  the  raw 
material  into  finished  products  the  manufacturers  of  steel 
billets  were  being  forced  to  look  elsewhere  for  a  market. 
In  this  they  had  the  assistance  of  the  boimties,  which  were 
then  paid  on  iron  and  steel,  whether  the  products  into  which 
steel  was  manufactured  were  exported  or  consumed  at 
home.  Hence  they  sold  steel  billets  in  the  United  States, 
instead  of  making  them  into  rails  in  Canada.  At  the  same 
time  Canada  was  importing  all  of  her  steel  rails.  ^ 

One  strong  argument  for  protection  h  in  the  fact  that 
the  United  States  Steel  Corporation  and  Grerman  exporters 
were  dumping  steel  rails  in  Canada.  Mr.  Clergue,  of  the 
Consolidated  Lake  Superior  Company,  maintained  that 
the  German  market  was  protected  by  a  duty  of  $6  to  $7 
per  ton,  and  that  the  price  in  Germany  was  ^0  to  $32  per 
ton.  The  freight  chai^ges  to  Port  Arthur  were  $6  per  ton, 
and  yet  the  Canadian  Northern  Railway  had  purchased 
rails  laid  down  at  Port  Arthur  for  $27,  at  which  figure 
Clergue  could  not  produce.  He  said  it  was  for  this  reason 
that  the  rail  mills  had  been  closed  down  in  1902  before  they 
had  really  begun  operations.* 

Mr.  Clergue  claimed,  too,  that  the  railroads  would  not 
be  injured  by  a  duty,  since  they  could  haul  their  own  rails 
when  produced  in  Canada,  and  would  be  indirectly  bene- 
fited by  the  industrial  development,  and  the  increase  of 
population  and  traffic.  Hence,  they  should  not  have  ob- 
jected to  a  reasonable  duty  on  rails.'  There  is  some  truth 
in  this  view.   Probably  Canadian  railways  can  bear  the 

*  Iron  Age,  vol.  lxx,  Dec.  4,  p.  30. 

*  Canadian  Annual  Review.  1902,  p.  298. 

*  Indiutrial  Canada,  vol.  v,  p.  70. 


wl 


VARIOUS  FEATURES  OF  LEGISLATION        177 

burden  of  protection,  without  passing  it  on.  better  than 
any  other  interest  in  Canada,  and  the  protection  of  iron 
and  steel  articles  used  by  railways  might  be  worthy  of  con- 
sideration. It  is  never  a  serious  matter  to  tax  such  natural 
monopolies.  The  most  difficult  task  is  to  get  the  legisla- 
tion passed. 

Finally,  it  was  pointed  out  that  there  was  scarcely  an- 
other product  into  which  Canadian  steel  was  turned,  on 
which  tariff  duties  were  not  higher  than  those  on  steel  rail- 
a  fact  which  made  the  manufacture  of  other  articles 
especially  profitable.  In  addition,  while  electric  railway 
rails  and  other  raUs  weighing  less  than  45  pounds  per  yard 
were  dutiable  at  35  per  cent,  rails  for  steam  railways  were 
free.  But  since  electric  railway  rails  are  heavier  than  45 
pounds  per  yard,  this  arrangement  gave  an  openmg  for 
fraud  in  the  importation  of  rails  for  use  on  street  railways. 
The  suggestion  was  that  aU  rails  be  put  on  Jie  list  at  $7 

per  ton.' 

In  anticipation  of  the  operation  of  the  raU  mills  at  the 
"Soo"  and  at  Sydney,  Nova  Scotia,  an  act  was  passed  m 
October,  1903,  giving  the  Govemor-in-CouncU  power  to 
impose  a  duty  of  $7  a  ton  on  steel  raUs,  when  it  was  satis- 
factorily shown  tnat  steel  rails  of  best  quality,  suitable  for 
use  in  Canadian  raUways,  were  being  made  in  Canada  in 
sufficient  quantity  to  meet  the  ordmary  requirements  of  the 

This  was  a  disappointment  in  that  it  left  the  mdustry 
apparently  unprotected  at  its  most  critical  moment;  that 
is.  before  the  whole  market  could  be  supplied.  It  was  feared 
that,  unceriain  of  securing  the  duty,  the  manufacturers 
might  consider  it  less  risky  to  continue  selling  billets  than 
to  make  them  into  rails,  especially  when  at  that  time  bU- 
lets  had  the  bounty  even  when  exported.' 

For  a  year  after  this  law  had  been  passed  not  a  smgle 

1  Industrial  Canada,  vol.  u.  p.  S21.        «  3  Ed.  VII,  190S.  chap.  15. 
•  Iran  Age.  vol.  uuu,  April  «9,  p.  22. 


1- 

1 

"1" 

1 

^H 

'%' 

t.^^H 

s 

~4 

.  :^ 

r 

«^^H 

. 

'^1 

ji ; 

i- 


II 


178    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

rail  woa  made  in  Canada.  The  difficulties  of  construction 
work  at  Sydney  were  great,  and  financial  conditions  at  the 
"Soo"  were  adverse.*  Nevertheless,  on  August  27,  1904, 
prior  to  the  election,  the  Government  passed  an  Order-in- 
Council  declaring  that  the  duty  should  go  into  effect  pro- 
viding that  shipments,  made  liefore  August  28,  passed 
through  the  customs,  and  laid  before  February  28,  1905, 
should  not  be  dutiable.'  Rails  bought  by  the  Government 
were  at  that  time  free  from  duty,  but  in  1906-07,  provision 
was  made  that  Government  purchases  should  no  longer  be 
exempt.* 

The  chief  objection  to  this  duty  has  come,  of  course,  from 
the  railways.  In  general,  it  may  be  said  that  the  construc- 
tion of  railways  has  been  of  nuch  paramount  importance 
that  it  should  not  have  been  restricted  by  the  backwardness 
of  any  particular  industry.  The  Canadian  Northern  had 
given  Mr.  Clergue  a  10,000  ton  order  for  rails  even  before 
the  duty  was  imposed,  but  2500  tons  had  been  delivered  in 
an  unsatisfactory  condition,  and  the  order  had  to  be  placed 
elsewhere.*  To  impose  a  duty  on  steel  rails  when  the  Cana- 
dian Pacific  was  expandin^^  its  system,  the  Grand  Trunk 
issuing  new  securities,  and  the  Grand  Trunk  Pacific  and 
Canadian  Northern  projecting  transcontinental  railways 
was  a  p>olicy  the  wisdom  of  which  was  doubtful.* 

Since  1904  the  railways  have  been  oppo:«>d  to  the  duties, 
pointing  out  that  in  periods  of  depression  the  steel  com- 
panies have  been  able  to  keep  the  market,  and  that  in 
periods  of  active  railway-building  there  is  no  adequate 
supply  in  Canada.  At  no  time  previous  to  1907,  when  the 
open-hearth  and  Bessemer  converter  capacity  of  the  two 
plants  at  Sault  Ste.  Marie  and  Sydney  was  increased,  did 
the  output  of  the  two  mills  satisfy  the  demand.  Yet  within 

>  Iron  Age,  vol.  lxxiii.  May  26,  p.  14, 
•  Ibid.,  vol.  ucxiv,  Oct.  27.  p.  38. 


•  6-7  Ed.  VII,  1906,  chap.  11. 

*  Iron  Age,  vol.  lxxiii,  Jan.  18,  p. 
'  Ibid.,  vol.  Lxxi,  April  16,  p.  34. 


15. 


-mi^^Mt' 


VARIOUS  FEATURi^S  OF  LEGISLATION        170 

a  month  after  the  mUU  began  work  the  Governrnont  was 
satisfied  that  steel  rails  were  being  made  m  .fficient 
quantity  to  meet  the  reciuirements  of  the  market,  and  an 
Order-in-Council  put  ihe  steel-raU  duty  into  operation. 
Since  1008  the  annual  production  has  averaged  about 
350  000  tons,  worth  about  $10,000,000.'  Steel  rails  are 
still  imported,  nevertheless,  in  amounts  varying  from 
$750,000  to  $1,500,000  annually.' 

The  actual  polii  y  in  respect  to  steel  rails  has  not  been  so 
inconsistent  from  the  pro..ctive  i)oint  of  view  as  the  stat- 
utory statement  of  it.  Possibly  there  was  some  chance  of 
developing  an  infant  industry.  But  the  law  as  stated  actu- 
ally offered  protection  to  the  ind.istry.  not  at  the  crucial 
moment,  but  when  rails  were  l^ing  made  in  Canada  in 
quantities  sufficient  to  supply  the  Canadian  demand.  It 
appears,  then,  that  the  Liberal  Party  had  completely 
abandoned  its  free-trade  views,  and  had  even  declared  it- 
self in  favor  of  a  policy  of  permanent  protection  for  fully 
developed  industries.  One  marvels  that  the  railways  ever 
permitted  the  Liberal  Party  so  far  to  forget  its  traditional 

policy. 

The  most  marked  effect  of  the  steel-rail  duty  is  that  the 
iron  and  steel  companies  have  been  able  to  .narket  steel 
rails,  especially  in  times  of  depression,  in  Indiaand  Australia 
in  competition  with  British,  German,  and  American  n.-mn- 
facturers."  Doubtless,  the  contention  of  the  railroat^s  th-it 
the  companies  have  done  this  in  order  to  '  .itain  pr.  :^ 'n 
Canada  is  a  serious  matter.  But  the  pract..  >  is  by  far  the 
most  relevant  feature  of  recent  Canadian  industrial  devel- 
opment, and  throws  a  good  deal  of  light  on  the  standmg 
of  the  Canadian  iron  and  steel  industry."  UntU  the  panic 
of  1907  the  Canadian  steel-rail  mills  had  even  more  orders 

»  E.  Porritt,  Sixty  Yean  of  Protection  in  Canada,  pp.  403-04. 

»  Produrtion  of  Iron  and  Steel  in  Canada,  181«,  p.  24. 

•  See  Appendix  G. 

«  Iron  Age,  vol.  ucxxn,  p.  1083. 

6  E.  Porritt.  The  Revolt  in  Canada,  pp.  133-38. 


■J 


.   H. 


I     : 


il^ 


W 


180    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

than  they  could  fill.  But  halfway  through  1908  there  was 
a  decrease  in  the  demand  for  rails,  and,  while  the  "Soo" 
mill  went  off  the  active  list  in  July,  the  Sydney  mill  rec- 
ognized that  it  was  imposs'ble  to  secure  orders  at  home. 
To  keep  its  rail  mill  employed,  the  Sydney  firm  did  as  it 
had  done  before:  it  renewed  its  export  business,  and  not 
without  success.  In  September,  1908,  9000  tons  of  rails 
were  sold  to  a  railway  in  India;  in  November  18,000  tons 
were  shipped  to  New  South  Wales,  and  a  few  days  later  the 
announcement  was  made  that  several  orders  had  been 
secured  from  railways  in  Mexico.  In  1909  the  Great  North- 
ern Railway  Company  of  England  ordered  5000  tons  from 
the  Canadian  firm.* 

Canada  rejoiced,  of  course,  that  a  Canadian  industry 
could  meet  foreign  competitors  in  a  world  market.  In  this 
connection  the  Dominion  Iron  and  Steel  Company  took  the 
people  of  Canada  into  its  confidence  to  a  remarkable  degree. 
The  extent  of  the  orders,  the  weight  per  yard  of  the  rails, 
orders  of  shipment,  and  the  pressure  of  the  overseas'  busi- 
ness on  the  rail  mill  were  all  emphasized.  The  exact  price, 
which  was  kept  a  secret  for  a  time,  was  supposed  to  be 
lower  than  that  at  which  rails  were  being  supplied  to  Ca- 
nadian railways.  Information  of  a  definite  character  was 
forthcoming  in  1909,  when  it  appeared  that  the  Dominion 
Iron  and  Steel  company  had  offered  to  supply  rails  for  the 
Transvaal,  at  a  price  about  7s.  lower  than  an  English  quo- 
tation of  £6  2«.  6d.,  that  is  at  about  $28  per  ton,  laid  down 
at  Delagoa  Bay,  South  Africa,  duty  paid.* 

This  dumping  of  rails  was  variously  interpreted.  The 
company  defended  it  on  the  basis  of  keeping  the  men 
employed  (some  3000  hands) '  at  a  time  of  financial  strin- 
gency, when  the  "  Soo  "  mill  had  had  to  shut  down.  "  Indus- 
trial Canada,"  the  organ  of  the  Canadian  Manufacturers' 


IP.  '• 


>  Montreal  Witness,  Aprii  30,  1909. 

*  Comnercial  Intelligence,  July  28,  1909. 

*  Iron  Age,  vol.  Lxxxii,  p.  1456. 


VARIOUS  FEATURES  OF  LEGISLATION       181 

Association,  called  it  an  achievement  for  the  "National 
Policy,"  which  had  supposedly  put  the  Canadian  concern 
in  a  position  to  compete  with  the  world.  ^ 

Some  people  were  rudely  critical.    English  companies 
claimed  that  this  was  a  matter  to  be  taken  up  at  the  Im- 
perial Conference  of  1911.  Canadian  railways  urged  that 
it  was  a  system  of  dumping  abroad  to  keep  up  prices  at 
home.  The  abolition  of  the  bounty  system  was  advocated 
by  most  of  those  who  discussed  the  matter,  but  the  rail- 
ways suggested  the  logical  proposition;  namely,  that  if  the 
Dominion  Iron  and  Steel  Company  could  capture  foreign 
business  in  the  face  of  competition,  it  ought  to  be  able  to 
hold  its  own  at  home  without  assistance,  and  hence  that 
unless  equally  favorable  prices  were  offered  Canadian  con- 
sumers, the  duty  of  $7  a  ton  should  be  abolished,  or  at 
least  reduced.* 

In  reply  to  criticism,  Mr.  Plummer,  the  president  of  the 
Dominion  Iron  and  Steel  Company,  said:  "We  consider 
our  plant  the  equal  of  any  in  the  world,  and  the  location  on 
tidewater  is  such  that  we  are  in  a  good  position  to  export. 
We  feel  that  we  should  endeavor  to  get  our  share  of  the 
world's  market  and  have  every  intention  of  continuing  to 
do  so.  In  exporting  rails,  we  are  following  the  example  of 
others  in  sellmg  products  to  the  best  advantage.   Prices 
abroad  show  a  profit  quite  apart  from  the  Government 
bounty."   In  1908  the  general  manag'^'-  made  the  state- 
ment: "Orders  for  rails  are  coming  from  all  over  the  world. 
The  plant  is  in  a  position  to  furnish  steel  to  the  world's 
markets  at  $6  a  ton  less  than  Pittsburg."  "   As  the  rail- 
ways contended,  the  frank  discussion  of  the  subject  by  the 
Dominion  Iron  and  Steel  interests  was  a  most  naive  ad- 
mission that  the  $7  duty  was  no  longer  necessary. 

1  Industrial  Canada,  December,  1908. 
*  Iron  Age,  vol.  lxxxii,  p.  1456. 
»  Montreal  Witness.  Dec.  14,  1908. 


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182    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

§  8.  American  competition  has  recently  been  the  great- 
est danger  to  Canadian  industry,  and  the  dumping  of 
United  States  products  at  sacrifice  pri<»s  m  Canadian 
markets  has  been  a  growing  menace.  Whenever  a  boom 
collapses,  American  iron  producers  cut  prices  in  foreign 
markets,  and  this  dumping  is  not  done  in  the  interests  of 
the  Canadian  consumer  of  iron  and  is  obviously  a  detri- 
ment to  Canadian  iron  and  steel  producers.' 

In  1903  United  States  iron  and  steel  products  were  being 
dumped  at  low  prices  in  competition  with  Canadian  out- 
put.'^ Since  it  was  a  time  of  depression,  this  dumping  fea- 
ture was  particularly  bad.  The  iron  and  steel  mterests  had 
long  been  pressing  for  higher  duties,  but  the  Government 
hesitated  to  give  assistance  by  a  general  advance,  so  the 
dumping  clause  of  1904  was  introduced  to  provide  a  sys- 
tem of  countervailing  duties  on  all  such  dumped  goods.' 

The  Dumping  Act  provided  that  whenever  it  should  ap- 
pear to  the  satisfaction  of  the  Minister  of  Customs  or  any 
oflBcer  of  customs  that  the  export  price  or  the  actual  selling 
price  to  the  importer  m  Canada  of  any  imported  dutiable 
article  of  a  class  or  kind  made  or  produced  in  Canada  was 
less  than  the  fair  market  value  thereof,  such  articles  should 
be  subject  to  a  special  customs  duty  equal  to  the  difference 
between  such  fair  market  value  and  such  selling  price,  in 
addition  to  the  duty  otherwise  established.  The  special 
duty  was  limited  to  one  half  of  the  customs  duty  otherwise 
established  on  most  articles,  and  to  15  per  cent  ad  valorem 
on  items  224,  226,  228,  231<  in  Schedule  A  of  the  Customs 
Tariff,  1897.  The  expression  "export  price"  was  defined 
as  the  exporter's  price  for  goods  exclusive  of  all  charges 
thereon  after  their  shipment  from  the  place  from  which 
they  would  be  exported  directly  to  Canada.  Provision  was 

»  Iron  Age,  vol.  lxxii,  Aug.  17,  p.  32. 

*  Ibid.,  vol.  Lxxiii,  March  3.  p.  18.  >  Ibid.,  June  16,  p.  29. 

*  Namely  pig  iron,  cast  scrap  iron,  iron  kentledge,  steel  ingot  blooms, 
slabs  and  billeU,  puddled  bars,  rolled  iron  and  steel  angles,  etc.,  roiled 
iron  and  steel  plates. 


VARIOUS  FEATURES  OF  LEGISLATION        183 

made  for  meeting  evasion  of  the  special  duty  by  any  mod^ 
S  consignment;  for  the  making  of  regulations  deemed 
nec^sa^for  carrying  out  the  provisions  of  the  act   m- 
cluing  temporary  exemption  of  articles  not  made  m 
cLada  in  substantial  quantities,  and  offered  f-  -le  to  al 
purchasers  on  equal  terms;  for  the  exemption  of  articles 
Z  which  the  duty  was  equal  to  50  per  cent  odv^^;^^^ 
of  goods  the  export  price  of  which  ^as  °nlyslighUy  under 
the  fair  market  value,  as  well  as  goods  subject  to  an  ex- 
cte  dity  in  Canada.  RoUed  romid  wire  rods,  which  we^ 
Z^  duty,  were  excepted  from  the  exemption  of  free 
gSds,  prodded  that  the  special  duty  should  not  exceed 

^^n^\907  the  Dumping  Act  was  made  applicable  to  all 
free  goods  under  the  general  law.  From  time  to  time  a  num- 
berof  Orders-in-Council  and  regulations  have  been  passed 

I  misunderstandmg  as  to  -^^'^'^'^^^f^^f'^Z 
goods  s.  ject  to  specific  duties  was  definitely  ended  by  the 
LlsionifevenfLgoods.^  InMay,1907  exem^^^^^^^^ 

made  of  iron  and  steel,  rolled,  drawn,  «r,P<>^-hed  ^^^^u^^ 
difference  between  the  fair  market  vahie  and  the  ^Umg 
price  to  the  Canadian  unporter  did  not  exceed  5  per  cent 
d  their  fair  market  value.  Oth«jo<^  were  exempte^ 
where  the  difference  did  not  exceed  n  P«^/*"/.   It  was 
provided  that  the  whole  difference  should  be  taken  into 
kccount  for  special  duty  purposes  when  exceedmg  5  per 
^"n  the  caTe  of  such  iron  and  steel,  and  when  exceedmg 
Tper  cent  in  other  cases.  In  December,  1908,  it  was  pro- 
'Jded  It  the  special  duty  should,  -?thout  ex^ption 
allowance,  apply  to  galvanized  wire    barbed  ^^,  ^d 
round  rolled  wire  rods  of  iron  and  steel  of  a  class  and  land 
made  in  Canada.  In  October,  1911,  the  Co^-rva^^^e  M- 
ministration  ordered  that  the  duty  ^^ould  not  app^^  to 

iron  and  steel  tubing,  when  the  d^^^^!^  fi^f^VhoL 

per  cent  of  the  fair  market  value,  provided  that  the  whole 

.  4  Ed.  VII.  1904.  chap.  U.  '  «"'  Ed.  VII.  1906.  chap.  U. 


*  . 


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184    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

difference  should  be  taken  into  account  for  special  duty 
purposes  when  exceeding  5  per  cent,  and  that  the  duty 
should  be  applied  without  exemption  to  tubing  over  4 
inches  and  not  exceeding  8  inches  in  diameter,  such  tubmg 
being  of  a  kind  or  class  made  in  Canada. 

The  fair  market  price  has  been  estimated  on  the  usual 
credit  basis  except  when  an  article  is  universally  sold  in  the 
country  of  export  for  cash  only,  in  which  case  the  fair 
market  value  is  estimated  on  the  cash  basis,  provided  that 
a  bona  fide  discount  for  cash  not  exceeding  2i  per  cent, 
when  allowed  and  deducted  by  the  exporter  on  his  in- 
voice, may  be  allowed  in  estimating  the  fair  market  value 
for  duty  purposes,* 

This  new  method  of  pro'  Ing  Canadian  manufacturers 
has  been  severely  criticized.  Nearly  all  agree  that  it  is  hard 
to  tell  what  the  market  value  is,  when  so  many  prices  are 
quoted  for  different  purchasers  and  since  quoted  prices  are 
seldom  actual  prices.  The  iron  and  steel  interests  them- 
selves admit  that  often  tb  Jause  cannot  be  applied,  as 
American  furnaces  sometimes  sell  part  of  their  product  for 
delivery  to  distant  points  in  their  own  country  at  prices 
as  low  as  for  shipment  to  Canada.  This  is,  however,  neces- 
sitafed  by  competition.  American  furnaces  have  to  cut 
prices  for  certain  markets  to  meet  the  prices  of  independent 
companies  even  withm  the  protected  market.  One  is  not 
surprised,  then,  that  the  export  price  i^  low,  when  Ameri- 
can iron  has  to  meet  avowedly  eflficient  Canadian  pro- 
ducere,  protected  not  only  by  transportation  rates,  but 
especially  by  customs  duties,  and  formeriy  even  by  boun- 
ties. The  British  preference  gives  a  special  reason  for  a 
differential  price  basis  if  the  American  producers  are  to 
sell  in  the  Canadian  market  at  all. 

After  all,  the  Dumping   Clause  seems  to  embody  a 
declaration  that  the  Canadian  industry  must  not  be  sub- 

»  CiwtoTM  Tariff  Act,  1907.  with  Appendix  (No.  6).  Aug.  10,  1912 
edition. 


VARIOUS  FEATURES  OF  LEGISLATION        185 

jected  to  external  competition.    Carried  to  its  pr«-.ti^l 
and  logical  conclusion,  it  means  that  American  ux,n  can- 
Tot  be  sold  to  Canadian  importers  at  less  than  the  pnce 
Setennined  by  the  United  States  Steel  Corporation  or 
o  ier^ericL  producers.    If  the  Canadian  Dumpmg 
Claused  work^  as  was  intended,  the  Canadian  pru^ 
would  necessarily  be  the  United  States  P^f '  P^^^J^. 
portation  charges,  as  weU  as  the  Canadian  duties.  If  such 
^ere  the  case.  Canada  would  be  in  a  f-^^J-^  ^^^^ 
the  United  States,  dominated,  as  it  s.  by  the  United  States 
Steel  Corporation.  It  is  a  strange  community,  indeed,  that 
can  accept  such  a  declaration  of  commercial  policy. 

One  is  not  surprised  that  the  Dumpmg  Clause  aroused 
considerable  discussion.    The  railways  «>°^Pl^!°«^,  *^^* 
they  were  deprived  cT  an  opportunity  to  buy  rods  abroad 
at  greatly  reduced  prices.^  The  highly  specialized  iron  and 
steel  industries  were  especially  grieved  by  not  being  able 
to^uy  supplies  freely  in  the  United  States.  The  Canadian 
Bridge  Company,  for  instance,  located  at  WalkerviUe. 
Ontario,  a  convenient  place  to  secure  raw  matenals  from 
Pittsburg.^  made  many  complaints.  The  application  of  the 
duty  to  tin  plate  in  1908  raised  such  objection  that  it  was 
repealed  in  1909.»    Some  feared  that  discnmina  ions  in 
favoTof  importers  in  certain  sections  might  follow  the 
application  of  the  law.*    British  chambers  o    ^^^^'^ 
complained,  almost  as  soon  a.  the  clause  went  mto  effect 
of  the  onerous  and  complicated  arrangements  -xs  to  details 
in  mvcices.  and  Canadian  importers  find  the  proce.  -  of 
makmg  en^ry  of  goods  an  interminable  burden^ 

It  is  a  difficult  matter  to  determine  to  what  extent  dump- 
ing has  actually  taken  place.  Government  document  do 
not  state  how  often  the  special  or  dumping  duty  has  been 
applied  to  iron  and  steel  imports  entering  Canada,  or  how 

1  Financicd  Post.  Feb.  27.  1909.  p.  15 

«  Iron  Age  vol.  lxxvi.  p.  670.  '  Kid.,  vol.  Lxxxn,  p.  3». 

*  dLI  1904.  p.  8847  •  Iron  A,e.  vol.  lxxxiv.  p.  S.S. 


iii 


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MM 


186    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

much  iron  and  steel  has  entered  under  the  duty;  but  the 
sum  of  $20,470.95  was  collected  as  special  duty  on  iron 
and  manufactures  of  u-on,  steel  and  manufactures  of  steel, 
or  both  combined,  in  the  fiscal  year  ending  March  31, 
1912.» 

Hence,  we  have  to  turn  to  an  entirely  different  and  quite 
as  unsatisfactory  source  of  information.  The  Canadian 
iron  and  steel  firms  have  been  in  the  habit  of  presenting 
figures  to  show  that  the  price  of  iron  and  steel  at  Pittsburg 
for  home  consumption  is  frequently  higher  than  the  price 
of  goods  for  export  to  Canada.  An  unsigned  pamphlet, 
evidently  published  by  the  Canadian  iron  and  steel  mter- 
ests,  gives  average  prices  for  foundry  pig  iron  at  Chicago, 
Buffalo,  Toronto,  and  Montreal,  for  the  years  1906  to  1911, 
to  show  that,  with  a  few  exceptions,  notably  1911,  the 
prices  of  pig  iron  were  higher  m  Canada  than  in  the  United 
States.  This  pamphlet  also  quotes  averages  of  high  and  low 
prices  for  the  period  in  order  to  prove  that  prices  have  been 
higher  in  the  United  States.  The  authors  have,  however, 
given  absolutely  no  consideration  to  the  possibility  that 
the  modal  monthly  or  yearly  orice  might  support  an  alto- 
gether different  conclusion.  Besides,  no  reference  to  the 
source  of  the  information  is  given,  except  m  respect  to  the 
prices  of  steel  bars. 

As  a  matter  of  fact,  the  term  "dumping"  is  quite  gen- 
erally misunderstood.  The  Dominion  Iron  and  Steel  Com- 
pany declared  itself  a  competitor  in  the  world  market  — 
an  equal  of  any  produce^  in  the  world.  In  1913  it  declared 
itself  ready  to  compete  in  the  Canadian  market  with  a 
Canadian  branch  of  the  United  States  Steel  Corporation; 
and  other  iron  and  steel  interests  have  declared  that  their 
plants  are  very  cflBcient.  If  Americaa  producers  are  to 
market  any  part  of  their  product  in  Canada,  in  competi- 
tion with  such  eflBcient  producers,  they  must  pay  a  part  of 
the  duty,  and  possibly  all  of  the  railway  charges.  In  other 

*  Private  CorrespoDdence,  Department  of  Customs,  Feb.  3, 1913. 


mt 


VARIOUS  FEATURES  OF  I£GISLATION        187 

words,  much  of  this  so-called  dumping  is  due  simply  to  the 
fact  that  American  producers  are  forced  to  bear  the  burden 
of  a  part  of  the  duty  paid  to  the  Canarian  Government  by 
reducing  the  prices  oi  their  exj)!  .ted  product. 

§  9.  One  difficulty  in  determming  the  influence  of  pro- 
tection is  the  fact  that  such  a  policy  may  assume  different 
orms.  In  Caxiada  toth  bounties  and  customs  duties  have 
been  given,  and  customs  duties  have  been  both  cd  valorem 
and  specific  or  mixed;  hence,  it  is  difficult  to  determine  the 
exact  amount  of  protection  granted  at  different  times  or  to 
different  articles. 

In  general,  one  may  say  that  the  recent  development  of 
the  Canadian  iron  and  steel  industry  has  taken  place  during 
a  period  of  lower  protection  than  existed  prior  to  1897.  Al- 
though the  Liberal  Party  has  been  accused  of  taking  over 
the  protective  policy  in  toto,  such  a  charge  does  not  seem  to 
be  valid,  at  least  so  far  as  the  iron  and  steel  sch"-  dule  is  con- 
cerned.  On  most  finished  articles  the  duty  was  reduced 
in  1897  by  10  per  cent  of  the  duties  previously  imposed. 
Furthermore,  the  British  preference  provided  for  an  ad- 
ditional reduction  amounting  to  about  one-quarter  of  the 
general  duties  in  the  new  tariff.  In  1900  the  preference  was 
increased  to  one  third  of  the  duties  in  force,  and  in  1907,  the 
preferential  tariff  and  the  general  tariff  were  again  re- 
duced by  about  \\  per  cent  in  the  adoption  of  imits  of  2i 
per  cent.  The  appUcation  of  a  duty  of  $7  per  ton  on  steel 
rails  weighing  over  45  pounds  per  yard  in  1903,  the  pay- 
ment of  bounties  on  wire  rods  between  1903  and  1911,  and 
on  rolled  angles,  tees,  plates,  etc.,  between  1903  and  1906, 
the  provision  of  duties  of  $3  per  ton  under  the  general 
tariff  and  $2  under  preferential  tariff  on  rolled  angles,  tees, 
plates,  etc.,  in  1906,  when  the  bounties  on  these  articles 
were  withdrawn,  the  provision  of  duties  on  wire  rods,  and 
the  advance  of  duties  on  heavier  structural  steel  in  1914, 
arc  practically  the  only  exceptions  to  the  reduction  of  p  o- 


if 


f-.s 


188    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 


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tection  in  this  schedule  covering  a  large  number  of  items 
and  an  important  volume  of  imports. 

Although  the  duties  on  certain  articles,  especially  pig 
iron,  wrought  scrap  iron  and  steel,  steel  billets,  and  bars 
were  very  considerably  reduced  by  the  revision  of  1896,  the 
bounty  system  was  continued  and  extended  as  compensa- 
tion to  the  primary  industry.  Some,  believing  that  Ameri- 
can producers  with  their  dumping  pMilicy  would  be  able  to 
nullify  the  efforts  of  tariff  duties,  thought  that  the  bounties 
would  prove  a  greater  assistance  to  the  Canadian  industry 
than  tariff  duties;  but  this  argument  does  not  appear 
sound.  The  United  States  Steel  Corporation  and  other 
American  producers  sell  at  cut  prices  to  meet  competition 
at  any  point,  whether  that  market  is  protected  by  a  duty 
or  whether  it  is  simply  a  competitive  point  within  the 
United  States  itself.  The  bounty  system,  by  offsetting  some 
of  the  costs  of  production  of  iron  and  steel  in  Canada,  has 
had  the  same  effect  on  the  so-called  dumping  of  American 
products  that  higher  tariff  duties  would  have  had.  The 
only  difference  in  the  two  forms  of  protection  lies  in  the 
changed  nature  of  the  competition.  Tariff  duties  might 
have  increased  the  cost  of  laying  down  American  products 
in  Canada;  the  bounties  have  necessitated  the  sale  of 
American  products  at  prices  low  enough  to  meet  the  price 
of  the  bounty-subsidizea  Canadian  product.  The  preven- 
tion of  dumping  is  not,  therefore,  a  special  virtue  of  a 
bounty  system.  Indeed,  bounties  are  granted  precisely  in 
order  that  the  prices  of  goods  may  be  low  enough  to  meet 
any  possible  competition,  and  that  the  manufacturing  con- 
sumers may  have  the  benefit  of  cheap  raw  materials. 

As  a  matter  of  fact,  the  bounty  system  has  made  possi- 
ble the  gradual  reduction  of  the  total  amount  of  protection. 
For  instance,  we  find  that  the  bounties  on  pig  iron  made 
from  foreign  ore  scaled  down  from  $2  per  ton  in  1897  to 
$1.10  in  1906,  and  that  they  have  since  gradually  disap- 
peared. The  bounties  on  rolled,  round  wire  rods  were  an 


H     t 


VARIOUS  FEATURES  OF  LEGISLATION        189 

exception  in  that  they  were  suddenly  cut  off  in  1911.  The 
substitution  of  specific  duties  in  1906  compensated  for  the 
abolition  of  the  bounties  on  manufactures  of  steel,  and 
protection  has  now  been  given  the  producers  of  wire  rods 
in  1914,  three  years  after  the  bounties  ended.  Considering, 
however,  that  the  duties  on  pig  iron,  bars,  and  billets,  as 
well  as  on  scrap  iron  and  steel,  were  large  before  1896,  the 
gradual  disappearance  of  the  compensatory  bounties  on 
these  primary  products  has  effected  an  important  reduction 
of  the  total  protection  previously  granted. 

In  short,  with  the  exception  of  a  few  items  there  has  been 
a  gradual  but  real  reduction  of  the  total  amount  of  protec- 
tion smce  1897,  especially  that  in  favor  of  the  production 
of  primary  products.  That  this  was  a  period  diuing  which 
the  Canadian  iron  and  steel  industry  made  quite  unprec- 
edented progress  will  appear  from  the  historical  account 
of  its  development  to  which  we  now  turn. 


■■■i      -li 


riRKIPSHBH 


^an 


a 


iiii 


CHAPTER  IX 

THE  RECENT  HISTORY  OF  THE  INDUSTRY 

§  1.  Arguments  which  advocates  for  protection  advance 
in  favor  of  their  policy  cannot  be  accepted  without  criti- 
cism. In  defending  themselves  against  inevitable  criticism, 
those  politicians  who  establish  a  policy  usually  exaggerate 
the  merits  of  their  solution  of  a  problem  and  continue  their 
policy  once  it  has  been  adopted.  Moreover  criticism  of  the 
policy  is  apt  to  bear  the  flavor  of  partisan  interest.  Both 
criticism  and  advocacy  of  protection  are  likely  to  have 
purposes  but  little  related  to  the  general  welfare  of  the 
country. 

Some  of  the  arguments  for  protection  have  already  been 
fully  considered,  and  their  merits  have  been  weighed  so  far 
as  possible.  One  other  claim  in  favor  of  protection,  par- 
ticularly of  the  bounty  system,  has  been  put  forth  with 
vigor  and  conviction  during  recent  years.  That  the  Cana- 
dian iron  and  steel  industry  has  developed  in  a  remarkable 
way  during  the  twentieth  century  '  apparent  to  all  who 
have  followed  recent  CansMiian  industrial  progress.  Most 
people  T,-ho  have  discussed  this  subject  have  simply  as- 
sumed that  thu  Canadian  iron  and  steel  industry  was  the 
offspring  of  the  commercial  policy  of  the  period.  As  a 
n  ter  of  fpct,  other  and  more  important  factors  have  con- 
tributed largely  to  this  significant  increase  of  output,  and 
the  growth  of  the  industry  is  not  necessarily  evidence  of  the 
success,  and  much  lt3s  a  justification,  of  such  a  policy. 

We  must,  of  course,  thoroughly  understand  the  develop- 
ment of  the  industry  in  order  to  come  to  a  scientific  con- 
clusion as  to  the  effect  of  the  tariff  and  bounty  system  on 
that  development,  or  to  estimate  the  wisdom  of  the  sys- 
tem itself.  The  subject  of  this  chapter  is  a  review  of  the 


THE  RECENT  fflSTORY  OF  THE  INDUSTRY    101 

progress  of  the  industry  during  th«  period  from  1896  to 
1914,  and  its  chief  purpose  is  to  ascertain  those  factors  that 
have  most  affected  the  course  of  events.  The  "how"  and 
the  "why"  of  the  jrogress  is  the  important  consideration 
that  needs  to  be  judged  with  an  open  mind  after  weighing 
the  facts.  What  part  the  tariff  and  bounty  system  has 
played  will  be  given  special  attention. 

§  2.  Undoubtedly,  the  Canadian  iron  and  steel  industry 
has  made  wonderful  strides  in  its  various  phases  during 
recent  years.  The  number  of  plants  and  blast  furnaces, 
the  capacity,  and  the  output  increased  greatly  between  1896 
and  1914.  In  1896  only  six  furnaces  produced  pig  iron 
in  Canada.  The  furnace  at  Hamilton,  Ontario,  had  a  capac- 
ity of  200  tons  daily;  the  one  at  Londonderry,  100  tons; 
that  at  Radnor  Forges,  25  tons;  trvo  at  Drummondville, 
7  and  8  tons;  and  the  Ferrona  furnace  had  a  capacity  of 
125  tons.'  In  1911  the  Dominion  Steel  Corporation  had 
four  completed  furnaces  each  of  280  tons'  capacity  per 
day.  This  corporation  built  two  more  of  the  same  size  in 
1912.  The  Nova  Scotia  Steel  and  Coal  Company  operated 
at  Sydney  Mines  one  furnace  with  a  capacity  of  200  tons 
(its  Ferrona  furnace  had  been  abandoned  as  early  as  1903). 
The  Canada  Iron  Corporation  owned  a  fnmace  of  100  tons' 
capacity  at  Londonderry,  Nova  Scotia;  two  small  furnaces 
of  7  and  8  tons'  capacity  at  Drummondville,  Quebec,  a 
25-ton  furnace  at  Radnor  Forges,  Quebec,  and  two  fur- 
naces of  125  and  250  tons'  capacity  at  Midland,  Ontario. 
A  furnace  of  65  tons'  capacity  was  operated  at  Descronto, 
Ontario.  The  Steel  Company  of  Canada  had  two  furnaces 
of  200  and  300  tons'  capacity  at  Hamilton,  Ontario.  The 
Algoma  Steel  Company  had  three  furnaces,  two  of  200  tons* 
capacity,  and  one  of  450  tons'  capacity,  at  Sault  Ste. 
Marie.  The  Atikokan  Iron  Company  had  one  furnace  of 
100  tons'  capacity  at  Port  Arthur,  Ontario.  In  1913  the 
'  Prvductiofi  of  Iron  and  Steel  in  Canada,  1811,  p.  18. 


i^ 


IM    THE  CANADIAN  IRON  ^\ND  STEEL  INDUSTRY 

Canadian  Furnace  Company  put  up  a  850-ton  furnace. 
In  addition  to  the  ordinary  furnaces,  there  were  a  few  small 
electric  furnaces  in  operation  in  Welland,  Toronto,  and 
elsewhere. 

This  indicates  a  growing  development  in  the  production 
of  pig  iron,  and  it  is  natural  that  the  production  of  steel  and 
of  iron  and  steel  products  should  advance  in  correspondence 
with  this  progress.  Not  only  were  many  more  furnaces 
built,  but  the  new  furnaces  were  almost  universally  of 
greater  capacity  and  were,  as  a  rule,  more  regularly  oper- 
ated, though  not  always  to  full  capacity. 

It  io  not  surprising  to  find  that  the  figures  for  the  out- 
put of  pig  iron  indicate  a  more  rapid  advance  than  the 
figures  representing  the  number  of  furnaces.^  For  the  fiscal 
years  1909, 1910,  and  1911,  the  combined  product  amounted 
to  1,937,144  tons;  over  19  times  the  product  of  104,882 
tons  in  the  years  1896,  1897,  and  1898.»  Add  to  this  the 
amount  produced  and  exported,  on  which,  therefore,  no 
bounties  were  paid  in  the  more  recent  period,  and  the  out- 
put is  enliirged  by  16,342  tons.*  A  consideration  of  per- 
centages shows  that  the  proportion  of  home  produce  to 
total  consumption  a<lvanced  from  36.2  per  cent  in  1884  to 
47.5  per  cent  m  1895,  and  to  66.9  per  cent  in  1911.  The 
lowest  percentage  of  home  product  to  total  consumption 
since  1900  was  64.5  *  in  1907. 

A  comparison  of  the  Canadian  output  of  pig  iron  unth 
the  output  of  the  United  States  and  with  the  total  output 
of  the  world  shows  growth  in  a  different  way.  (See  table 
on  next  page.) 

The  Canadian  percentage  of  the  world's  pig-iron  produc- 
tion rose  from  .221  per  cent  in  1900  to  .608  per  cent  in  1901, 
to  1.142  per  cent  in  191U,  and  to  1.324  per  cent  in  1911. 


'  Appendix  B,  Table  I. 

*  The  total  production  of  pig  iron  in  the  calendar  year  191S  amounted 
to  1,023,973  metric  tons. 

»  Canada  Year  Book,  lall,  p.  108.  *  Appendix  B,  Tit'Ule  I. 


-^^TTffiSSB*? 


TUCTTi^vScr- 


,l"-' 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    lOS 

Pig  iron  (metric  tona)  produced  in  Canada,  the  United  States, 
and  the  world,  and  the  percentagen  of  Canadian  to  the  world 
output  in  the  calendar  yearn  lOlK)  to  1913,  inclusive  ' 


Y«r 
(ralcudar) 

Canada 

Uiiite<l  SUtea 

World 

rrmnUfe 

1900 

87,51« 

14.009.870 

39,599.437 

.221 

)001 

24H.H00 

16,132,408 

40.950.002 

.608 

J    ' 

343,070 

18,003,44  < 

44,342.570 

.733 

I. 

269,605 

18,297.400 

47.113.730 

.585 

IWH 

274.777 

16,760,988 

4j.060,5OI 

.589 

1905 

475,491 

23,340.258 

54,054,783 

.879 

1906 

550,618 

25.706,882 

59,074,861 

.932 

1907 

590.444 

26.103.863 

60,680.014 

.'.ns 

1908 

572. 12S 

16.100,994 

48.640.479 

1,175 

1909 

687,023 

20,108,199 

61.217.064 

1.123 

1910 

752.000 

27,636.687 

65,008.674 

1.142 

1911 

837,558 

24.027.733 

63,210,694 

1.325 

1912 

027.484 

30.202,508 

— 

— 

1913 

1.023.973 

— ^ 

Those  percentages  seem  small,  but  the  output  for  1901  was 
almost  three  times  that  for  1900,  the  output  for  1905  over 
five  times  that  of  1900,  and  the  output  for  1913  almost 
twelve  times  that  for  1900.  Canada  became  the  eighth 
producing  nation  of  the  w^orld  by  moving  ahead  of  Sweden 
in  1908.'  Meanwhile,  the  output  of  the  United  States 
increased  from  a  little  over  14,000,000  metric  tons  in  1900 
to  something  more  than  23,000,000  metric  tons  in  190.5 
and  to  approximately  30,000,000  metric  tons  in  1912.  In 
other  words,  the  Canadian  production  has  developed  rela- 
tively, though  not  absolutely  faster  than  that  of  the  United 
C  tat  IS.  It  is  still  too  early  to  expect  the  Canadian  pro- 
duc\  to  increase  absolutely  faster,  ^.ven  though  the  rela- 
tive advance  is  high. 

Likewise,  the  manufacture  of  steel  in  Crnada  has  had  a 
growth  even  more  rapid  than  the  growth  of  the  world  por- 
duction  of  steel.  The  following  table  shows  that  the  per- 

>  Mineral  I.idiistry,  1910,  p.  381;  1911,  p.  43."!;  1912,  p.  ■•42;  1913,  p. 
423. 

'  Can&da,  Report  on  Mineral  Production,  1907  to  1908,  p.  78. 


ii 


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'.'■•^  ■  "s 


4025;^w.S 


V?^.-"E'  '   Mf^S^S' ^ 


I   I 


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19*    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

centage  of  Canadian  to  world  output  advanced  from  .083 
in  1900  to  .529  in  1902,  to  .919  in  1905,  and  to  1.508  in  1911. 
The  Canadian  output  for  1902  was  eight  times  as  large  as 
that  of  1900;  the  output  for  1905  was  over  seven  times  as 
large  as  that  of  1900,  and  the  output  of  1911  was  almost 
thirty-seven  times  as  large  as  that  of  1900.  Meanwhile,  the 
output  of  the  United  States  increased  from  over  10,000,000 
tons  in  1900  to  20,000,000  tons  in  1905,  and  to  31,000,000 
tons  in  1913.  In  short,  the  American  output  was  little 
more  than  tripled  in  thirteen  years. 

Steel  production  (metric  tons)  in  Canada,  the  United  States, 
and  the  world,  and  the  percentage  v,/  Canadian  to  the  world 
output  for  the  calendar  years  1900  to  1913  ^ 


Year 

Canada 

United  States 

World 

Percentage 

1900 

23,954 

10,382,069 

28,727,239 

.083 

1901 

26,501 

13,689,175 

31.449,869 

.084 

1902 

184,950 

15,186,406 

34,972,497 

.629 

1903 

181,514 

14,756,691 

36,298,414 

.600 

1904 

151,165 

13,746,051 

36,148,079 

.414 

1905 

403,449 

20,354,291 

43.900,648 

.919 

1906 

515.200 

23,772,506 

49,635,998 

1.040 

1907 

516,.S0O 

23,733,391 

51,273,340 

1.007 

1908 

598,183 

14,2!.7,619 

44,359,522 

1.348 

1909 

766,795 

24,338,302 

53,499,974 

1.433 

1910 

835,478 

26,512,437 

58,656,312 

1.424 

1911 

880,278 

24,054,918 

58,375,701 

1.501 

1912 

— 

31,751,324 

— 

— 

1913 

— ~ 

31,822,555 

— 

' 

§  3.  Let  us  turn  now  to  the  development  of  specific  Ca- 
nadian industrial  enteqirises.  Few  have  had  so  enviable  a 
reputation  as  the  Nova  Scotia  Steel  and  Coal  Company 
and  the  firms  out  of  which  it  has  grown.  The  early  develop- 
ment of  the  Nova  Scotia  Steel  Company,  down  to  1896,  we 
have  already  considered.  The  original  reasons  for  placing 
the  furnaces  at  Ferrona  were  the  immense  deposit  of  ore 

»  Mineral  Industry,  1911.  p.  435;  1913.  p.  423. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    195 

and  the  proximity  to  coal  and  limestone,  thought  to  be 
located  there.  But  as  early  as  1896  difficulties  were  ex- 
perienced with  the  fuel,  and  after  several  trials  with  Cape 
Breton  coal  the  company  ordered  a  large  amount  from  the 
General  Mining  Association  of  Nova  Scotia.  This  change, 
together  with  the  fact  that  the  company  was  procuring  an 
increasing  amount  of  ore  from  the  \Va'  ana  Mine,  New- 
foundland, led  to  the  suggestion  that  the  furnace  work 
should  be  removed  to  Cape  Breton.* 

Nothing  was  done,  however,  for  several  years.  In  1899 
the  output  was  larger  than  ever  before.  High  prices  pre- 
vailed, ore  was  being  shipped  abroad,  and  profits  and  divi- 
dends were  high.^  As  the  supply  of  coal  from  the  Pictou 
fields  was  quite  inadequate,  the  company  had  to  make  a 
change.  Accordingly,  in  1900,  the  Nova  Scotia  Steel  Com- 
pany acquired  all  the  properties,  rights,  and  leases  of  the 
General  Mining  Association  at  Sydney  Mines,  Cape  Bre- 
ton.' Preparation  was  thus  made  for  more  extensive  opera- 
tions. In  1901  considerable  additions  and  improvements 
were  made  to  the  works  at  Ferrona  and  Trenton,  and  a 
large  new  coal-shipping  pier  was  built  at  North  Sydney.* 
New  coal  areas  were  opened  at  Trenton  for  steam  and  heat- 
ing purposes  at  the  steel  works,  and  at  Sydney  Mines  to 
secure  coal  for  coking  purposes.*  Also  an  expert  was  em- 
ployed to  make  a  careful  survey  of  the  iron  areas  near 
Arisaig  and  Antigonish.' 

In  view  of  these  developments,  the  Nova  Scotia  Steel 
and  Coal  Company  was  formed,  absorbing  the  General 
Mining  Association,  the  directors  of  which  became  the 
directors  of  the  new  organization.^ 

Meanwhile,  coke  ovens  had  been  built  at  Sydney  Mines, 

since  it  was  cheaper  to  ship  coke  than  coal.*  But  as  coke 

»  Monetary  Times,  vol.  XXX,  p.  924.       '  Ibid.,  vol.  xxxiii,  p.  1187. 
'  Ibid.,  vol.  XXXIV,  p.  618.  *  Ibid.,  vol.  xxxv,  p.  493. 

*  Canadian  Mining  Rerietr,  vol.  xx,  p.  168. 

*  Monetary  Times,  vol.  xxxv,  p.  166.      '  Ibid.,  p.  197. 

*  Ibid.,  vol.  XXXVI,  p.  274. 


M 


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it 


m 


196    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

depreciates  in  quality  when  transported  any  distance,  it 
would  have  been  more  satisfactory  to  produce  the  iron 
near  the  coal  mines  and  coking  ovens.  Moreover,  the 
greater  proportion  of  the  ore  used  at  Ferrona  came  from 
Wabana,  and  the  distance  of  transport  from  Wabana  to 
Ferrona  exceeded  that  to  Sydney  Mines  by  over  one  hun- 
dred miics.  Since  piers  had  already  been  built  at  North 
Sydney,  nt  ar  Sydney  Mines,  the  pro<'.uction  of  pig  iron  and 
steel  at  Sydney  Mines  would  have  been  more  economical. 
Steel  could  have  been  shipped  to  Ferrona  and  Trenton  to 
be  worked  up  into  finished  protiucts.  In  March,  1902,  the 
company  decided  to  build  immediately  at  Sydney  Mines.* 
The  subsequent  history  of  the  Nova  Scotia  Steel  and 
Coal  Company  is  a  story  of  steady  and  aggressive  progress 
in  the  output  of  ore,  pig  iron,  billets,  and  finished  products. 
Even  before  the  nev.'  blast  furnace  was  built,  the  increas- 
ing demand  for  coal  could  not  be  met.''  The  additional  out- 
put of  iron  demanded  ;m  80  per  cent  increase  in  the  out- 
put of  coal  in  1903.'  Anither  large  colliery  at  Bras  d'Or 
Lake  was  opened,  and  a  Sv^^ond  large  shipping  pier  was 
built  at  North  Sydney.^  Tie  output  of  iron  ore  was  in- 
creased from  4000  to  5000  tons  daily,  and  exports  were 
made  to  Rotterdam  and  Glasgow.  While  the  works  at 
Trenton  and  Ferrona  we"e  employed  at  full  capacity,  the 
new  blast  furnace  was  being  built/*  The  year  1904  marked 
the  completion  of  the  policy  of  expansion  in  Cape  Breton. 
It  was  claimed  that  the  Sydney  Mines  coal  mines  was  the 
only  paying  part  of  the  old  plant.  The  co.i!  mine  at  Coal- 
burn,  Nova  Scotia,  on  which  over  $500,001)  hud  been  spent, 
was  worthless,"  the  Ferrona  plant  had  ootsxro,*!!  its  use- 
fulness, and  the  furnace  was  becoming  (^bsolete.^  For  these 
reasons  the  old  furnace  at  Ferrona  wsui  closed  down,* 


>  Monetary  Times,  vol.  xxxv,  p.  1194.  '  Ibid.,  vol.  xxx\a,  p.  S46. 

»  Ibid.,  vol.  XXXVII,  p.  836.  *  Ibid.,  vol.  xxxvi,  p.  1601. 

'  Ibid.,  vol.  XXXVII,  p.  187.  '  IbiA,^  vol,  xxxviii,  p.  166. 

'  Ibid.,  p.  195.  •  Ibid.,  pp.  «27-«8. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    197 

when  the  new  blast  furnace  was  opened  in  September  of 

With  a  view  to  increasing  operations  in  new  and  more 
profitable  branches,  one  battery  of  30  Bauer  retort  coke 
ovens,  three  batteries  of  40  Bernard  retort  ovens,  three 
40-ton  open-hearth  steel  furnaces  of  the  modern  type  of  the 
basic  Siemens-Martin  process  were  erected.'  and  all  were 
in  operation  by  July,  1905.='  In  1905  a  rolUng  furnace,  to 
be  used  as  a  mixer,  was  installed,' and  large  submarine  ore 
areas  were  purchased  north  of  Wabana.^   The  year  1907 
saw  the  acouisition  of  iron  ore  areas  in  BrazU.^  In  1908  a 
new  colliery  was  opened  at  Sydney  Mines,  a  new  forge 
building  constructed  and  other  improvements  made  at  New 
Glasgow."*  In  1909  and  1910  development  work  was  kept 
up  at  Wabana  by  the  installation  of  new  machinery.  In 
1910  the  blast  furnace  and  open-hearth  furnaces  were  re- 
modeled.'   In  the  same  yep^  the  increasing  demand  for 
finished  products  warranted  extensions  at  New  Glasgow, 
including  two  new  roUmg  mUL ,  with  the  necessary  power 
plant  and  other  devices,  such  as  a  25-ton  electric  crane  for 
disposing  of  the  increasing  output.*  In  1911  machinery  for 
handling  all  kinds  of  heavy  steel  forgings  was  installed  in  a 
plant  which  surpasses  everything  of  the  kind  in  Canp/)'* 
This  machinery  wUl  be  able  to  meet  aU  Canadian  requue- 
ments  in  forgings  for  the  next  few  years.* 

In  1912  the  Eastern  Car  Company  was  formed  by  di- 
rectors of  the  Nova  Scotia  Steel  and  Coal  Company  to 
buUd  steel  railway  cars  at  New  Glasgow  at  a  plant  in  close 
proximity  to  the  steel  plant.  In  1913  a  new  colliery  was 

>  Canadian  Mining  Review,  vol.  xxiii,  p.  77. 

'  Monetary  Times,  vol.  xxxviii,  p.  1349.       

»  Commercial  and  Financial  Chronicle,  vol.  LXXXin,  p.  210. 

*  Monetary  Timjia,  vol.  srsxTi,  p.  417. 

»  Canadian  Mining  Journal,  vol.  xxvii,  p.  1 58. 

«  /Wd.,  vol.  XXIX.  p.  61.        '  Monetary  Timet,  vol.  XLVI,  p.  544. 

'  Ibid.,  vol.  XLiv.  p.  Hi- 

8  Canadian  Mining  Journal,  vol.  xxxu,  p.  S25= 


Ml 


I" 


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1. 


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198    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

opened  and  a  50-ton  open-hearth  furnace  built  at  Sydney 
Mines.  A  bolt  ar>d  rivet  factory  was  erected  at  New  Glas- 
gow to  produce  material  for  the  Eastern  Car  Company.' 
The  Nova  Scotia  Steel  and  Coal  Company  is  living  up  to 
its  reputation  of  entering  into  every  profitable  branch  of 
the  steel  trade.* 

Altogether  the  properties  of  the  Nova  Scotia  Steel  and 
Coal  Company  form  now  a  very  satisfactory  and  complete 
unit.  The  ore-beds  at  Wabana,  including  the  submarine 
areas,  give  evidence  of  being  more  valuable  than  was  at 
first  thought.'  The  coal  min^s  at  Sydney  Mines  are  very 
extensive  and  contain  probably  1,000,000,000  tons,*  and  the 
coal  produced  by  five  collieries  is  excellent  for  the  produc- 
tion of  coke  for  smelting.  The  limestone  quarry  of  250 
acres  at  Point  Edward,  Cape  Breton,  is  connected  with  the 
furnace  at  Sydney  Mines  by  seventeen  miles  of  the  Inter- 
colonial Railway.  The  limestone  is  very  uniform  and  suit- 
able for  steel-making.  Other  properties  are  held  in  reserve.^ 
The  blast  furnace  is  nearer  to  coal  than  any  other  plant  in 
the  Dominion,  inasmuch  as  the  headgear  of  the  mine,  from 
which  coal  is  secured  for  coking,  is  within  sight  of  the  fur- 
nace.* The  machinery  is  of  the  most  modern  character. 
Coal-washers,  coke  ovens,  coal  and  ore  piers  at  North 
Sydney  and  Wabana,  the  railway  connecting  North  Sydney 
with  the  various  plants  at  Sydney  Mines,  steel  furnaces,  re- 
pair shops,  and  foundries,  dwelling  houses,  and  stores  at 
Sydney  Mines  complete  a  most  efficient  plant  for  the  pro- 
duction of  pig  iron  and  steel  billets. 

The  works  of  the  company  from  which  its  finished  pro- 
ducts are  shipped  are  situated  at  New  Glasgow,  Nova 
Scotia.  This  plant  mcludes  two  large  continuous  steel 
furnaces,  plate  mills,  guide  mills,  spike  machines,  forges, 

»  Monetary  Times,  vol.  xLvn,  p.  2i23.  »  Ibid.,  vol.  u,  p.  «50. 

'  Ibid.,  vol.  XLin,  p.  2034. 

*  Souvenir  of  Nova  Scotia  Steel  and  Coal  Company,  1910,  p.  20. 

*  Canada,  Report  on  Mining  and  Metallurgical  Industries,  pp.  551-50. 

*  Canadian  Mining  Institute  Bulletin,  Januuiy,  "JOS,  p.  40. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    199 

car  axles  and  machine  shops,  structural  steel  shops,  etc., 
of  the  most  modern  character. 

The  success  of  the  Nova  Scotia  Steel  and  Coal  Company 
is  a  bjm'ord  in  Canadian  finance.  This  company  is  one  of  a 
few  that  has  had  a  steady  growth  in  output  and  earnings 
from  its  inception.*  Scarcity  of  labor  has  been  at  times  a 
dangerous  handicap;  but  the  use  of  labor-sa\4ng  devices 
and  modem  machinery,  as  well  as  the  rounding  out  of  the 
plant,  has  so  reduced  costs  as  to  place  the  company  on  a 
very  favorable  competitive  basis.''  The  company  seems  to 
have  had  a  faculty  for  meeting  special  conditions  by  the 
adoption  of  original  mechanical  devices,  and  other  inven- 
tions.' 

Cautious,  conservative,  yet  at  the  same  time  aggressive 
management  has  been  an  important  factor  during  the 
period  of  development.*  Many  improvements  had  been 
made  out  of  earnings,  until  a  recent  change  in  policy  led  to 
the  issuing  of  a  common  stock  bonus  or  dividend  of  $1,000,- 
000  in  1909,  to  cover  such  outlay. 

The  varied  nature  of  the  output  has  ordinarily  been  an 
advantage.  Since  all  lines  of  production  are  not  apt  to  be 
affected  by  competition  and  low  prices  at  the  same  time, 
profits  are  less  liable  to  extreme  fluctuation.  More  recent 
specialization  in  the  du-ection  of  railway  supplies  has  prob- 
ably somewhat  reduced  this  advantage;  especially  as  the 
company  does  not  produce  steel  rails,  and  hence  does  not 
directly  benefit  from  new  railway  construction.  During 
1911  prices  of  iron  and  steel  were  low,  but  this  difficulty 
was  met  by  a  reduction  of  costs.  That  the  profits  did  not 
fall  off  shows  that  substantial  economies  have  been  ef- 
fected; and  altogether  that  the  company  has  passed 
through  the  stage  of  development  during  which  it  neer'ed 
assistance. 

»  McCuaig's  Circulars,  June  28,  1911. 
'  Monetary  Times,  vol.  xliv,  p.  1*2. 

•  Caruhlian  Mining  Institute  Bulletin,  January,  1909,  p.  48. 

*  Cari'iJtttf;  Miniug  Rtiiiew,  vol.  xxiii,  p.  103. 


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200    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

§  4.  If  the  growth  of  the  "^  ova  Scotia  Steel  and  Coal 
\  Company  has  i>een  admirably  conservative,  yet  regidar, 
';   that  of  the  Dominion  Iron  and  Steel  Company  has  been 

spectacular,  but  fluctuating, 
j  The  inspiration  for  the  venture  ca'  ie  from  a  weU-known 
Boston  capitalist  and  financier,  Mr.  Henry  M.  Whitney,' 
I  who  had  alre.idy  become  a  familiar  figure  in  Canadian 
'■'  finance  through  his  connection  with  the  Dominion  Coal 
Company.  In  1893  the  Dominion  Coal  Company  revolu- 
tionized the  whole  coal  trade  by  expanding  its  marketing 
to  New  England  and  St.  Lawrence  ports.  The  Canadian 
market,  however,  was  limited  during  the  close  of  naviga- 
tion on  the  St.  Lawrence  in  winter,  when  the  coal  company 
had  either  to  bank  its  product  or  close  down.  Then  the 
Boston  Smoke  Nuisance  Law  of  1896  reduced  the  American 
market  for  Nova  Scotia  coal,  which  is  none  too  clean. 
Moreover,  the  increase  in  1897  from  40  to  67  cents  in  the 
duty  on  coal  entering  the  United  States  resulted  in  an  in- 
crease in  the  duties  collected  on  Nova  Scotia  coal  from 
$499,682  in  1897  to  $786,587  in  1898;  an  increase  in  the 
average  ad  valorem  duty  from  14.24  per  cent  to  24.15  per 
cent,2  and  a  decrease  in  the  amount  of  coal  sold  in  New 
England.  At  its  best  the  United  States  oflFered  a  fickle 
market  for  Canadian  coal.' 

It  was  to  relieve  this  situation  that  Mr.  Whitney  pro- 
ceeded to  establish  large  iron  and  steel  works  at  Sydney  as 
an  advantageously  regular  purchaser  of  the  output  of  coal. 
In  1899  the  Dominion  Iron  and  Steel  Company  made  a 
contract  with  the  Dominion  Coal  Company  for  the  supply 
of  coai  from  the  Phelan  seam,  which  on  analysis  had  proved 
suitable  for  the  manufacture  of  iron  and  -teel. 
Evidently,  the  iron  and  steel  project  had  some  merits  of 

•  McGrath,  op.  cit.,  p.  372. 

»  United  States,  Tarif  Comparison,  part  n,  Table  of  Imports,  1894- 
1904.  p.  755. 

*  Canadian  Mining  Renew,  vol.  xxii,  p.  137. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    201 

its  own.  When,  in  1898  and  1899,  it  was  reported  that  a 
large  iron  and  steel  plant  was  to  be  built  at  Sydney,  finan- 
cial and  trade  papers  immediately  vied  with  one  another 
in  a  glowing  description  of  the  favorable  conditions  under 
which  the  enterprise  would  be  launched.  The  feature  from 
which  most  was  expected  was  the  nature  of  the  ore  mines 
at  Wabana,  BeU  Island,  Newfoundland,  which  had  been 
purchased  from  the  Nova  Scotia  Steel  Company  for  $1,000,- 
000   It  was  reported  that  the  possession  of  the  mme  would 
enable  the  new  company  to  procure  ore  at  a  lower  price,  to 
manufacture  cheaper,  and  to  sell  for  less  than  any  other 
producer  in  the  worid,  andat  the  same  time  to  make  as  large 
profits  as  any  competitor.  Ore  could  be  fed  to  the  blast 
furnaces  at  Sydney  at  a  maximum  cost  of  $1.25  per  ton. 
Minnesota  ore  had  to  be  carried  by  raU  from  the  mines  to 
the  Lake,  then  shipped  through  the  Lakes  and  canals  to  a 
port  on  Lake  Erie,  unloaded  and  carried  by  rail  agam  to  the 
furnace  mouth.  Wabana  ore  could  be  mined  by  open  cut 
and  loaded  on  board  ship  at  a  single  handling  for  45  cents 
per  ton  as  compa  red  with  50  to  80  cents  for  mining  alone  in 
Minnesota.  It  could  be  shipped  380  miles  over  the  Gulf  of 
St.  Lawrence  in  the  largest  ocean-going  vessels  at  a  cost  of 
45  cents  a  ton.  as  compared  with  a  water  rate  of  about  $1 
per  ton  for  shipments  down  the  Lakes.  It  is  true  that  the 
Wabana  ore  is  not  so  rich  as  that  of  the  Lake  Superior  re- 
gion, but  it  is  a  high-grade  ore  which  mixes  readily  with 
others.  In  short,  Sydney  was  to  have  ores  at  a  cost  of  $1.25 
as  compared  with  $2.50  to  $3.25  per  ton  at  Pittsburg.' 
There  seems  to  have  been  some  justification  for  such  hopes, 
for  in  1907  the  cost  of  iron  ores  at  Sydney  was  82  cents  per 

ton.'^  ,.     , 

Proximity  to  the  European  market  was  another  favor- 
able condition.  Neariy  all  American  furnaces  are  haudi- 
capped  by  remoteness  from  the  seaboard.  The  Pittsburj 

1  MfGrath.  op.  cit..  p,  Sftl- 

»  Canada,  Report  of  Mining  and  MeiaUurgical  Induatnes,  p.  637. 


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202    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

output  has  to  be  hauled  by  rail  to  tidewater,  an  average 
distance  of  450  miles,  at  a  cost  of  half  a  cent  per  mile  per 
ton,  or  $2.25  per  ton.  Alabama  iron  reaches  New  Orleans 
after  a  carriage  of  530  miles  at  a  cost  of  $2.65  per  ton.  This 
advantage  was  increased  by  the  fact  that  Sydney  is  800 
miles  nearer  to  Liverpool  than  is  New  York,  and  2200 
miles  nearer  than  New  Orleans.  Sydney's  position  on  a 
splendid  harbor  on  the  seaboard,  where  ores  and  coal 
could  be  cheaply  assembled  and  from  which  products 
could  be  conveniently  shipped,  certainly  offered  an  ex- 
traordinary advantage. 

It  was  estimated  that  low  costs  of  production  at  Sydney, 
together  with  low  freight  rates  to  Europe,  would  permit 
the  firm  to  lay  down  iron  and  steel  in  England  at  a  hand- 
some profit  even  in  times  of  depression.  The  company  ex- 
pected to  land  pig  iron  in  Liverpool  at  a  cost  of  $8  per  ton, 
and  steel  billets  at  $13,  while  the  average  price  at  which 
these  had  sold  in  England  for  the  decade  1890  to  1900  had 
been  $14.60  for  pig  iron  and  $22.90  for  steel  billets. i  Such 
an  opportunity  was  not  to  be  overlooked.  The  organi- 
zation of  the  industry  was  to  be  in  thr  hands  of  the  most 
capable  men  that  money  could  procure;  every  stage  of  devel- 
opment was  to  be  properly  cared  for;  the  plant  was  to  be 
of  the  most  advanced  type,  and  the  firm  was  to  profit  by 
the  experience  of  existing  industries  on  both  sides  of  the 
Atlantic. 

Sydney  was  chosen  as  the  site  of  the  steel  works  be- 
cause it  was  already  the  outlet  of  the  coal  trade;  it  was 
located  in  the  center  of  the  coal  and  limestone  area;  it 
possessed  a  tract  of  land  near  the  wate  front  eminently 
suited  to  the  purpose;  the  harbor  was  capacious  and  safe, 
and  already  known  as  a  coaling  port;  it  was  a  terminus  of 
the  Intercolonial  Railway  and  a  point  of  call  of  many  Amer- 
ican and  Canadian  coastal  steamers;  and  a  40-mile  railway 
connected  Sydney  with  Louisburg,  an  all-winter  shipping 
»  McGrath,  op.  cit.,  pp.  376-84. 


, 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    «0S 

port  '   The  promise  of  exemption  from  local  taxation  for 
Shirty  years  and  a  grant  of  five  hundred  acres  of  property 
on  the  harbor »  were  other  inducements  to  build  at  Sydney. 
It  has  been  said  that  if  the  Dominion  Government  had 
not  granted  bounties,  the  Dominion  Iron  and  Steel  Com- 
pany  might  not  have  begun  the  enterprise.    Certamly,  an 
estimate  that  bomities   amounting   to  $8,095,000  would 
be  received  before  1908  was  no  smaU  encouragement  to 
"timid"  capital.'    My  own  opinion  is  that  the  Sydney 
plant  would  have  been  built  in  any  case.   That  the  real 
causes  for  the  development  of  this  important  company 
were  industrial  has  been  frankly  acknowledged  ma  letter 
wriv.ten  in  1900  to  Mr.  H.  M.  Whitney  by  Mr.  Grtdiam 
Fraser,  then  general  manager  of  the  Nova  Scotia  Steel 
Company.  After  a  conference  the  two  interests  agreed  to 
cooperate  to  get  the  bounties  extended  for  a  penod  of  five 
years  from  1902.    Although  the  bounties  would  help  in 
securing  capital,  Mr.  Whitney  was  willmg  tj  go  on  with 
the  works  whether  or  not  the  bounties  were  >;iven.  In  1903 
a  letter  from  Mr.  Fraser  to  Mr.  Whitncj.  was  quoted  by 
Mr.  Borden,  leader  of  the  Conservative  Opposition,  to  show 
that  Sir  Charles  Tupper,  rather  than  the  Liberal  Party,  had 
been  responsible  for  the  development  of  the  Dominion  Iron 
and  Steel  Company,  inasmuch  as  Sir  Charles  had  intro- 
duced Mr.  Whitney  to  influential  financial  interests  m 
England.  Mr.  Graham  wrote:  "You  [Whitneyl  stated  in 
1899  that  you  thought  we  had  better  go  on  with  our  new 
works,  as  you  did  not  believe  the  Government  would  ex- 
tend the  bounties.  As  Sir  Charles  Tupper  was  going  over 
to  England,  you  could  get  him  to  introduce  you  to  parties 
who  would  find  the  capital.  I  replied  that  if  you  begin  to 
build  the  large  plant  you  are  talking  of,  I  do  not  believe  the 
bounties  will  be  extended."  *  A  more  naive  confession  of  the 

«  McGrath.  op.  cii.,  p.  372.  »  Ibid.,  pp.  384-85. 

»  Commercial  and  Financial  Chronicle,  vol.  LXXII.  p.  683. 

«  Debates,  IP?'*,  pp.  7933-35. 


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204    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

methods  used  to  extort  Goverament  favors  an  i  of  the  fact 
that  the  plant  would  in  all  probability  have  been  built  can 
scarcely  be  conceived. 

By  1900  extensive  building  operations  were  being  carried 
on.  Four  blast  furnaces  of  the  latest  type  and  capable  of 
producing  250  to  400  tons  of  pig  iron  daily,  ten  basic  open- 
hearth  steel  furnaces  of  1000  tons*  daily  capacity,  a  85- 
inch  blooming  mill,  400  Hoffman  coke  ovens,  a  coal-wash- 
ing plant,  and  a  large  machine  shop  and  foundry  were 
installed.*   The  coking  plant  was  put  in  operation  as  early 
as  December,  1900.*  Skilled  labor  was  imported  from  Eu- 
rope.' Since  the  limestone  deposits  at  Sydney  appeared  to 
be  less  extensive  than  htid  been  expected,*  large  quarries 
at  Bras  d'Or  Lake  were  purchased  to  insure  an  adequate 
supply  of  fluxing  materiab.  The  first  furnaces  were  blown 
In  on  February  2,  1901,  and  others  in  October,  1901.'  Pig 
iron  was  shipped  to  Scotland  and  to  the  United  States  later 
in  the  year.'  The  manufacture  of  steel  was  commenced  in 
December,  1901,  with  highly  satisfactory  results,  according 
to  a  test  made  by  the  Baldwin  Locomotive  Works  of 
Philadelphia.^  Steel  ingots  were  shipped  to  Scotland,  pend- 
ing the  completion  of  the  billet  mill.*  The  building  of  a 
steel-rail  mill  was  seriously  contemplated  in  1901,  but  the 
purchase  of  rails  elsewhere  by  the  Dominion  Government 
in  1902  altered  the  plans  of  the  company.  The  production 
of  structural  steel,  for  which  there  was  a  larger  Canadian 
market,  was  favored  for  a  time.'  The  completion  and  per- 
fection of  the  organization  of  other  departments,  such 

»  E.  Phillips,  "Competition  in  the  Iron  and  Steel  Industry,"  Engineer- 
ing Magazine,  vol.  xxi,  p.  S45. 

•  Commercial  and  Financial  Chronicle,  vol.  lxxi,  p.  1169. 
Iron  Age,  vol.  lxvii,  Si-ptcmber  5,  p.  41. 
Monetary  Times,  vol.  xxxiv,  p.  204. 
'     nmereial  and  Financial  Chronicle,  vol.  Lxxni,  p.  959. 
Monetary  Times,  vol.  xxxv,  p.  618. 
Ibid.,  p.  843. 

•  E.  Porritt,  Sixty  Years  of  Protection  in  Canada,  p.  127. 

•  /row  Age.  vol.  lxx.  Deeembef  25,  p.  3. 


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THE  RECENT  fflSTORY  OF  THE  INDUSTRY    805 

as  the  coal-washing  plant,  was  thought  advisable,  before 
pushing  the  rail  mUl  to  completion.*  Modem  machinery 
was  placed  in  the  mines  and  at  the  shipping  piers.*  Ad- 
ditional ore  areas  were  purchased  in  Cuba  and  Labrador, 
and  Swedisl  ores  were  imported  to  mix  with  the  Wabana 

ores. 
•§<  The  Dominion  Iron  and  Steel  Company  has  not  always 

enjoyed  favorable  financial  conditions.   Indeed,  the  com- 
pany has  on  several  occasions  faced  serious  financial  embar- 
rassment. Although  it  has  never  been  insolvent,  the  irreg- 
ularities caus>  d  by  extravagance  and  prolonged  conflict 
with  the  Dominion  Coal  Company  have  been  very  serious. 
In  the  first  place  there  was  much  reckless  outlay  of  funds. 
Whitney,  the  president,  and  Moxham,  the  general  man- 
ager, were  as  extravagant  in  building  the  plant  as  in  talk- 
ing of  it.  Frequent  changes  in  the  official  staff  and  lack  of 
coordination  of  the  different  departments  had  an  unfavor- 
able effect.*  It  is  said  that  the  whole  worlcs  could  have  been 
built  for  two  thirds  of  what  they  cos»,  .»nd  that  $7,000,000 
or  $8,000,000  was  wasted.   Moxham  had  no  idea  of  costs, 
nor  did  he  know  how  to  organize  and  adjust  the  various 
departments.  He  failed  to  ascertain  at  an  early  date  just 
what  class  of  steel  could  be  made  from  the  ore,  which  was 
discovered  to  be  non-Bessemer  after  considerable  expendi- 
ture had  been  made.*  He  seemed  to  think  that  cheap  ore 
and  coal  would  place  the  finished  product  in  the  world 
market  at  any  time,  but  the  company  found  that  it  could 
afford  to  sell  pig  iron  and  steel  billets  only  in  times  of  ex- 
ceptionally high  prices.'  The  directorate  itself  was  largely 
ignorant  of  the  business.  The  ore  mines  dil  not  turn  out  as 
expected  at  first;  and,  as  we  shall  see,  the  coal  supply  was 
a  constant  source  of  trouble.^ 

I  Commercial  and  Financial  Chronicle,  vol.  Lxxv,  p.  27.    

»  /Wd..  p.  27.  •  Monetary  Timea,  vol.  xxxvi,  p.  171. 

«  Canadian  Mining  Review,  vol.  xx.  p.  76. 

*  llnd.,  V      XXII,  p.  186.  *  Ibid.,  vol.  xxm,  p.  103. 

*  Jeans,  op.  cU.,  pp.  129-23. 


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«0G    THE  C.V.NADIAN  IRON  AN*>  STEEL  INDUSTRY 

The  subsequent  rounding-out  and  extension  of  the  plant 
has  been  conducted,  for  the  j^reater  part,  under  unfavorable 
financial  conditions  caused  by  the  initial  extravagance  and 
the  increase  of  floating  debt  involved  in  the  relations  with 
the  Dominion  Coal  Company.  The  lease  of  the  proper- 
ties of  the  Dominion  Coal  Company  at  an  excessive  rental 
soon  resulted  in  a  large;  floating  debt,  which  amounted 
to  $i,500,000  in  1903,  at  a  ti-ne  when  financial  conditions 
wen  not  favorable  to  issuing  n'iw  bonds,  either  foi  retire- 
ment of  th'j  debt  or  for  construction.' 

In  spite  f  financial  diflSculties  the  plant  was  gradually 
made  efficient.  The  lease  was  canceled  and  a  new  coal  con- 
tract arranged.  In  1903  the  blast  furnaces  had  a  greater 
capacity  than  the  steel  plant,  and  the  steel  plant  itself  had 
to  sell  its  product  in  the  unfinished  stiite  "^  in  the  United 
States  and  Scotland  as  well  as  in  Canada.'  As  the  demand 
for  steel  billets  in  the  United  States  had  fallen  off  and 
prices  had  declined,  the  open-hearth  furnaces  were  closed 
and  the  night  shift  taken  of!  the  blooming  mills.*  Since 
finished  products  are  always  more  marketable '  than 
primary  products,  the  comi«iny  decided  to  erect  finishing 
mills.  The  idea  of  exporting  seems  to  have  been  conven- 
iently forgotten.  Plans  for  a  rail  mill,  with  a  capacity  of 
1000  tons  instead  of  3000  tons  per  day,  were  made,  with 
the  idea  that  such  a  ruill  would  be  large  enough  to  take  care 
of  the  Canadian  trade.  The  erection  of  rod  mills,  of  plate, 
angle,  and  bar  mi".  *,  was  also  suggested.' 

The  realization  of  some  of  these  plans  took  several  years. 
To  reduce  costs  during  the  period  of  stress,  wages  and  sala- 
ries were  reduced,^  and  a  long-continued  strike,  in  protest, 
practically  shut  down  the  entire  works.*   Ultimately  the 

'  Commercial  and  Financial  Chronicle,  vol.  lxxv,  p.  1402. 
'  Iron  Age,  vol.  lxxii,  July  30,  p.  27. 

•  Monetary  Times,  vol.  xxxvi,  p.  734.  *  Ifnd.,  vol.  xxxvii,  p.  149. 
»  Ibid.,  p.  149.  •  Ifrid.,  vol.  xaavi,  p  1304. 
'  Commercial  and  Financial  Chronicle,  vol.  lxxvii,  p.  2337. 

*  E.  Poi'nll,  The  Reioil  m  Canada,  p.  ioU, 


\.:.  -gL'i^"'"J'.'.#J 


BW 


THE  RECENT  HISTORY  OP  THE  INDUSTRY    «07 

men  returned  to  work  at  the  old  rates,'  hut  only  after  the 
strike  had  cost  the  company  about  $500,000.» 

The  wire-rod  mill  was  in  operation  in  1904,  and  its  prod- 
uct gave  satisfaction  to  consumers.*  So  many  orders  were 
received  that  a  double  shift  was  put  on  in  Dei-ember,  1904. 
Unfortunately,  as  soon  as  the  wire-rod  miU  was  in  a  condi- 
tion to  produce,  the  United  States  Steel  Corporation  pre- 
sented a  contract  to  Canadian  wire-drawers  and  naU- 
makers,  engaginf,'  them  to  buy  all  rods  for  six  months  from 
it.  All  wire-makers  except  James  Pender,  of  St.  John,  New 
Brunswick,  who  had  already  arranged  to  buy  from  the 
Doi  i=nion  Iron  and  Steel  Company,  were  forced  to  sign. 
In  spite  of  this  drawback,  by  19(15,  the  rod  mill  was  de- 
scribed as  "running  to  i)erfection,"  and  was  supplymg 
eighty-five  per  cent  of  the  iron  rods  used  in  Canada. 
Eleven  of  the  thirteen  nail  factories  were  purchasing  from 
it.'  The  steel-rail  mill  was  m  operation  by  June,  1905,  and 
doing  good  work  on  Government  orders." 

In  the  latter  part  of  1906  a  dispute  with  the  coal  com- 
pany, in  regard  to  the  quantity  and  grade  of  coal  to  be  de- 
livered, forced  the  steel  company  to  bank  its  furnaces.  The 
extended  lawsuit  that  followed  necessitAted  asking  for  a 
large  amount  of  credit  from  the  banks  to  cover  an  increas- 
ing floating  debt,  and  to  cover  large  items  of  accounts  re- 
ceivable and  of  raw  and  manufactured  material.'  An  ad- 
verse court  decision  might  hcve  completely  wiped  out  the 
claim  against  the  coal  company,  and  have  left  the  steel 
company  with  liabilities  it  could  not  meet.  The  carrying 
of  the  case  from  one  court  to  another,  with  no  prospect  of 
immediate  settlement,  the  necessity  for  a  laiger  amount 

>  Commercial  and  Financial  Chronicle,  vol.  LXXVin,  p.  8337. 

»  Monetary  Times,  vol.  lxxdc,  p.  50«. 

»  Canadian  Mining  Review,  vol.  xxni,  p.  254. 

«  Monetary  Times,  vol.  xxxviii,  p.  7*4. 

»  Iron  Age,  vol.  xxxviii,  p.  1850. 

•  Ibid.,  vol.  ixxvi,  p.  571. 

'  Commzrdal  ar-d  Fir^nrial  Ckronide,  vol.  L3a:XYU.  p-  99. 


Mi 


l^\ 


t 

f 

It 


808    THE  CANADIAN  ffiON  AND  STEEL  DTDUSTRY 

of  working  capital,'  as  well  as  more  capital  for  extensions, 
if  the  policy  of  rounding-out  the  plant  was  to  be  continued, 
all  made  advisable  a  reorganization  of  finances  to  reduce 
fixed  charges.  This  included  a  reduction  of  the  sinking 
funds,  from  $257,500  per  year  for  the  period  1908  to  1911, 
to  $164,170  for  the  period  thereafter.* 

During  1907  and  1908  the  Dominion  Iron  and  Steel  Com- 
pany was  one  of  the  few  companies  that  did  not  suffer  from 
the  depression  of  trade.   Although  nearly  all  other  mills 
were  closed  for  a  time,  all  departments  of  the  Dominion 
Iron  and  Steel  Company  were  kept  in  full  operation,  and 
the  volume  of  the  business  was  maintained  with  steady 
employment  and  no  decrease  of  wages  for  the  employees.' 
Naturally  the  curtailment  of  the  home  market  and  low 
prices  were  disadvantages,  but  these  were  offset  by  the 
exportation  of  steel  rails  to  England  and  India.*  Condi- 
tions were  practically  the  same  m  1909.  Large  orders  came 
in  regularly  for  both  rails  and  rods.    Mr.  Rummer,  the 
president,  reported  that  the  orders  of  the  company  were 
beyond  its  capacity  and  that  extensions  had  to  be  pushed.* 
When  the  coal  diflBculty  was  partly  settled  through  the 
payment  by  the  coal  company  of  $2,750,000  in  the  early 
part  of  1909,«  the  floating  debt  was  paid  off,  and  the  com- 
pany had  a  cash  reserve.^  Since  then  financial  and  indus- 
trial operations  have  been  comparatively  unhampered. 
There  has  been  a  continuous  recovery  from  the  precarious 
position  rendered  inevitable  by  prolonged  litigation.    A 
report  by  British  experts  in  1909  said  that  "no  iron  and 
steel  works  is  in  a  better  position  for  the  supply  of  cheap 
raw  materials  for  the  manufacture  of  pig  iron  and  steel. 
The  fact  that  they  own  very  valuable  ore  and  limestone 
properties,  together  with  a  special  agreement  whereby  they 
'  Commercial  and  Financial  Chronicle,  vol.  lxxxvi,  p.  1587. 
'  Estimated.  »  Monetary  Times,  vol.  xlii,  p.  2280. 

*  Commercial  and  Financial  Chronicle,  vol.  lxxxv'ii,  p.  1616. 
»  Itnd.,  vol.  Lxxxix,  p.  695.  •  Ibid.,  vol.  Lxxxviii,  p.  675. 

'  Ilnd.,  p.  1064. 


'  THE  RECENT  mSTORY  OF  THE  INDUSTRY    209 

are  assured  of  cheap  fuel  supply,  renders  them  independent 
of  market  fluctuations  and  plar  ^  them  in  a  most  excep- 
tional position.  The  cost  of  Miiiii^  the  10^.000,000  tons  of 
ore  in  sight  is  likely  to  remai  so  low  as  lo  y"  Id  a  handsome 
profit  either  by  converting  1  i  to  finisiie^  products  or  by 
selling  it  in  the  open  marke*,.     ' 

This  report,  so  widely  published,  seemed  to  justify  ex- 
tensions to  increase  the  output  and  reduce  costs  in  order 
to  offset  the  expected  endii-g  of  the  bounty  system.''  A  new 
blast  furnace  was  added  to  enable  the  company  to  devote 
four  furnaces  to  the  production  of  basic  pig  for  the  steel 
plant,  and  to  produce  foundry  pig  without  any  interfer- 
ence with  the  steady  working  of  the  steel  department.  A 
new  finishing  mill,  to  use  a  large  tonnage  of  material  pre- 
viously treated  as  scrap,  was  to  give  the  company  a  larger 
output,  by  enlarging  the  varieties  of  the  finished  material 
it  could  turn  out.^ 

The  chief  development  in  1910  was  the  amalgamation 
of  the  Dominion  Iron  and  Steel  Company  and  the  Domin- 
ion Coal  Company  into  the  Dominion  Steel  Corporation, 
which  later  secured  control  of  the  Cumberland  Railway 
and  Coal  Company  at  Springhill,  Nova  Scotia.  Each  of 
these  developments  will  be  more  fully  discussed  in  another 
chapter.  It  is  enough  to  say  at  present  that  thereby  a  sup- 
ply of  coal  for  a  long  period  of  time  was  assured,  and  that 
further  economies  were  expected  from  this  scheme. 

In  1911  discussion  centered  around  the  question  of  the 
renewal  of  the  bounties,  or  the  possibility  of  securing  pro- 
tective duties;  or,  failing  either,  the  possibility  of  reducing 
costs  in  order  to  keep  up  the  measure  of  profits.  The  Do- 
minion Steel  Corporation  was  feeling  the  pressure  of  the 
competition  of  surplus  American  stock.  While  Mr.  Plum- 
mer  admitted  that  the  boiuities  were  no  longer  necessary 
for  the  general  business  of  the  company,  he  declared  that 


»  Anmial  Rfjiorf.  1909. 
»  Ibid.,  pp.  127-28. 


*  Statiit.  vol.  LXiv,  p.  88. 


:  I 


i  I 


1 


> ;     I 


210    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 


I* ' 


reciprocity  would  end  the  wire-rod  business  and  would 
prevent  the  renewal  of  bounties  on  wire  rods.*  Mr.  Plum- 
mer  asked  for  rod  bounties  for  another  year  and  a  half,  so 
as  to  allow  the  transition  stage,  during  which  extensions 
were  being  completed,  to  be  tided  over. 

Since  neither  protection  nor  bounties  seemed  forthcom- 
ing, an  additional  new  plant  was  installed  in  order  to 
reduce  costs  in  1911.  The  annual  report  of  1911  declared 
that  success  in  the  future  depended  on  the  possibility  of 
increasing  the  output.  Two  open-hearth  mixers,  with  a 
cai)acity  of  500  tons  each,  were  added,  to  eliminate  the  ne- 
cessity of  purchasing  expensive  ores.  A  third  Bessemer  fur- 
nace was  ready  in  the  autumn  of  1911  to  assure  a  suflScient 
supply  of  iron  and  a  larger  output  of  steel  per  furnace;  120 
coke  ovens  were  put  in  full  blast  late  in  the  season  ;2  a  new 
cold  rolling  mill  and  extensions  to  the  old  cold  roUmg  mill, 
which  was  converted  into  a  bar  and  rod  mill,  were  also 
added. ^  The  two  new  furnaces  were  started,  one  in  1911 
and  the  other  in  1912.*  The  compu-iy  now  began  to  pro- 
duce wire,  wire  nails,  bolts,  nuts,  etc.,  in  order  to  offset  the 
loss  of  the  bounties  and  to  insure  a  market  and  a  profitable 
use  for  the  output  of  rods.  A  new  merchant-bar  mill,  for 
rolling  all  sizes  of  merchant  bar,  rivet,  steel,  bolt,  and  bar 
material  was  also  installed.^  The  nail  mill  was  operating 
so  satisfactorily,  in  May,  1912,»  that  the  company  ordered 
additional  machinery  with  the  idea  of  ultimately  consum- 
ing the  entire  product  of  the  wire-rod  and  wire  mills.^ 

The  Dominion  Steel  Corporation,  with  its  outstanding 
common  stock  of  $35,656,800,  its  preferred  stock  of  $7,000,- 
000,  preferred  stock  of  subsidiary  companies  amounting  to 
$8,000,000,  and  funded  and  mortgage  debt,  including  that 
of  subsidiary  companies,  amounting  to  about  $25,000,000,' 

'  Financial  Post,  February  11,  1911.  p.  1. 

»  Monetary  Times,  vol.  xlvii,  p.  742.     '  Iron  Age,  vol.  Lxxix,  p.  101. 

*  Monetari)  Times.  ■  ol.  XLrx,  p.  406.       '  Ibid.,  vol.  xlvii,  p.  742. 

•  Ibid..  v<il.  XLViii,  „.  2226.  '  Ibid.,  vol.  L,  p.  292. 
>  Atmual  Report,  1912,  p.  22. 


THE  RECENT  I  ISTORY  OF  THE  INDUSTRY    811 

is  one  of  the  largest  and  most  important  industrial  enter- 
prises  in  Canada.    The  steel  plant  at  Sydney,  the  ore 
deposits  at  Wabana  and  elsewhere,  the  coal  mmes  at  Glace 
Bay,  Cape  Breton,  and  at  Sp.  nghUl,  Nova  Scotia,  are  all 
in  a  state  of  high  efficiency  under  aggressive  management. 
The  company  produces  a  wide  varii  y  of  products  at  a 
good  margin  of  profit.  Mr.  Plummer  said,  in  1912:  "Our 
hopes  for  the  Sydney  plant  are  bound  up  with  the  m- 
crease  of  its  output,  partly  from  the  profit  from  mcreiised 
sales,  but  most  of  all  from  decreased  costs  which  wall  re- 
sult from  the  larger  output.  This  will  complete  the  work 
which  the  bounties  have  so  far  helped  us  to  carry  on.»  We 
have  had  to  exercise  patience  in  the  past  and  we  must  wait 
the  completion  of  the  new  work  before  we  can  get  large 
results,  but  your  directors  have  the  most  implicit  confidence 
in  the  outcome  of  your  steel  business,  that  there  will  before 
long  be  earnings  sufficient  to  satisfy  your  reasonable  ex- 
pectations. It  has  taken  longer  to  reach  our  goal  than  we 
expected,  but  the  gettmg  of  a  largely  increased  tonnage  is 
now  purely  a  matter  U  time,  the  market  for  it  is  assured 
and  with  these  we  cannot  faU  to  secure  prosperity  for  the 
plant  "2  In  1912  he  reported  that  Canadian  raU  mills  could 
supply  the  rail  demand  of  Canada,  at  least  all  but  an  ex- 
ceptional  demand.'  Apropos  of  the  building  of  the  United 
States  Steel  Corporation  plant  in  Canada,  Mr.  Plummer 
said-  "There  is  room  for  all  of  us  in  Canada.   The  Domin- 
ion Steel  Corporation  is  not  afraid  of  competition  frona  the 
United  States  Steel  Trust  or  anybody  else.     Mr.  J.  K. 
Wilson,  vice-president,  said:  "One  may  draw  his  conclu- 
sions as  regards  competition.  For  instance,  m  buying  ore 
the  Dominion  Steel  Corporation  pays  about  $1.75  per  ton, 
while  the  United  States  Steel  Corporation  pays  $3  to  $4. 
Yet  he  admits  that  competition  may  be  keenly  felt  m  west- 

»  McCuaig's  Circular,  October  46,  1910. 

•  Annual  Report,  1911,  p.  9. 

'  Monelaru  Times,  vol.  xiAX,  p.  358. 


n 


i  f !: 


812    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

ern  Ontario.'  In  1913  Mr.  Plummer  gave  assurance  that 
the  corporation  was  doing  a  very  satisfactory  business,  and 
that  there  was  no  real  reason  for  the  drop  in  prices  of  the 
stocks  of  the  company.'^  Evidently  the  future  of  the  Do- 
minion Steel  Corporation  is  bright,  indeed,  notwithstand- 
ing the  loss  of  the  bounties. 


11; 


fii 


3  ; 


§  5.  The  establishment  of  an  iron  and  steel  industry  at 
Sault  Ste.  Marie,  Ontario,  by  Mr.  F.  H.  Clergue,  was  the 
sequel  to  the  rapid  development  of  a  power  and  paper 
plant  at  the  same  place.  When  experts,  working  on  a  proc- 
ess for  saxnng  sulphur  in  the  production  of  nickel,  found 
that  the  residue  was  an  alloy  of  steel,  so  superior  to  any- 
thing known  that  the  Krupps,  the  great  German  gun- 
makers,  made  a  contract  for  a  five  years'  supply,  a  reduc- 
tion works  and  a  ferro-nickel  plant  were  immediately  built. 
But  since  the  percentage  of  nickel  in  the  product  was  about 
7  per  cent,  while  the  amount  required  for  armor  plates  is 
only  about  Sj  per  cent,  and  as  a  deposit  of  iron  ore  was 
found  at  the  now  well-known  Helen  Mine,  near  Michipi- 
coten,  in  1897,'  Clergue  decided  to  produce  iron  to  be  used 
with  the  ferro-nickel.  In  this  way  Clergue,  an  American 
attorney,  who  had  no  knowledge  of  the  iron  and  steel  in- 
dustry, and  was  associated  with  other  enterprises  not  con- 
spicuously successful,  found  his  way  into  the  iron  and  steel 
industry  of  Canada. 

Mr.  Clergue  had  imbounded  imagination,  initiative,  and 
confidence.  These  qualities  first  appeared  in  the  formation 
of  the  Consolidated  Lake  Superior  Company  in  1899,  with 
a  capital  of  $20,000,000  to  acquire  and  develop  already 
partially  developed  water  powers,  along  with  other  indus- 
tries at  Sault  Ste.  Marie.*  Later  in  the  year  the  capital 
stock  of  the  Consolidated  Lake  Superior  Company  was 

»  Monetary  Times,  vol.  l,  p.  139.        *  Ibid.,  vol.  Li,  p.  706. 

*  Canadian  Engineer,  vol.  x.  pp.  15-20. 

*  Commercial  and  Financial  Chronicle,  vol.  hx.vu,  p.  1075. 


THE  RECENT  fflSTORY  OF  THE  INDUSTRY    213 

increase.1  to  $35,000,000  of  preferred  stock  and  ^^j^'^ 
of  common  stock.  This  was  supposed  to  be  justified  m  part 
by  a  re-appraisal  of  the  Helen  Mme.^ 

By  19(£  ore  was  being  shipped  from  the  Helen  Mine  to 
Hamilton.  Midland.  Ontario,  and  to  the  United  S^tes.^  and 
2000  tons  a  day  were  being  mined.  Since  the  water  freight 
rates  were  low,  and  a  40  cent  duty  was  evied  on  u:on  ore 
entering  the  United  States.'  there  was  talk  of  shipments  to 
Europe.  When,  however.  Clergue's  request  was  graced 
that  in  all  future  subsidies  to  raUways  there  should  be  a 
provision  that  the  raUways  should  use  Canadian-made 
rails,  and  when  in  1901  the  Government  gave  Ckrgue  a 
large  order  for  rails  at  an  extraordinary  price,  the  budding 
of  a  mill  for  the  production  of  steel  rails  was  immediately 

^^  Inlp'ril,  1901.  the  Algoma  Steel  Company  was  formed. 
as  a  subsidiary  of  the  Consolidated  Lake  Superior  Com- 
pany, to  manufacture  and  trade  in  iron  and  steel  and 
products  thereof,  charcoal,  coke,  and  by-products  and  to 
build  bridges,  cars,  locomotives,  steamships,  and  other 
structures.^  In  May  contracts  were  let  for  the  erection  of  a 
$10,000,000  plant.'   Two  charcoal  and  two  coke  furnaces 
were  begmi,  but  subsequently  work  on  the  coke  fuma^» 
was  suspended.'  A  large  number  of  men  were  employed  m 
the  construction  of  railways,  ore  docks  and  a  madime  shop, 
and  in  exploration. «  New  iron  deposits  were  discovered 
twenty  miles  north  of  the  "Soo."  A  char.^  plant,  to  sup- 
ply fuel,  was  put  up  near  the  blast  fumax^s.  and  ovens 
were  built  to  treat  the  by-products.  It  was  expected  that  a 
coke  plant  would  be  erected  to  treat  coal  brought  up  from 

>  Commercial  and  Financial  Chronicle,  vol.  Lxxn.  p.  9S8. 

*  Canadian  Mining  Review,  vol.  XX,  p.  US- 

•  Commerdal  and  Financial  Chronicle,  vol.  tea.  p.  »i«- 

«  Morang's  Regi^er.  1901.  pp.  99-102.  »  Ibtd..  p.  3». 

•  Monetary  Timet,  vol.  xxxiv.  p.  1513. 

*  Canadian  Mining  Manual,  1903.  p.  xvix. 
»  Monetary  Tiines.  vol.  xxxv.  p.  459. 


.  5 


Ji^^ 


214    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

porta  on  Lake  Erie.  Steel  works  of  the  most  modern  de- 
scription, consisting  of  two  Bessemer  converters,  a  bloom- 
ing mill,  and  a  rail  mill,  were  built.  A  railway  line  also 
was  constructed  from  the  Helen  Mine  to  Michipicoten 
Harbor,  The  company  had  a  fleet  of  steamers,  which 
made  semi-weekly  trips  from  the  Toledo  district  to  the 
"So'  and  Michipicoten,  carrying  iron  ore,  coal,  and  pig 
iron. 

The  Bessemer  steel  mill  was  opened  in  February,'  and 
steel  rails  were  rolled  in  May,  1902.^  The  plant,  thoroughly 
equipped  in  a  modem  way,  was  capable  of  producing  daily 
600  tons  of  Bessemer  steel  ingots  and  100  tons  of  rails. 
Labor  cost  was  at  a  minimum,  because  of  the  use  of  low- 
cost  electric  power  on  almost  every  machine.  The  mining 
operations  of  the  company,  yieldmg  large  profits  from  the 
mining,  transportation,  and  sale,  were  probably  the  most 
encouraging.'  Pending  the  completion  of  the  blast  fur- 
naces, pig  iron  was  purchased  in  the  open  market  at  low 
prices,  chiefly  from  the  new  Midland  Furnace,*  but  it  was 
expected  that  the  completion  of  the  furnaces  would  give 
the  company  its  own  supply  at  a  cost  lower  than  market 
prices,  especially  if  the  bounty  on  pig  iron  were  deducted 
from  the  actual  cost.*  In  1902  the  Algoma  Tube  Works 
was  incorporated  to  manufacture  metallic  tubes  under  a 
special  patent  from  material  to  be  secured  from  the  other 
departments.' 

In  December,  1902,  the  works  were  suddenly  closed 
down.  Clergue  had  failed  to  secure  protection  for  steel 
rails,  and  MacKenzie  and  Mann,  of  the  Canadian  North- 
ern Railway,  had  bought  steel  rails,  far  below  the  regular 
price,  from  German  manufacturers,  who  were  said  to  be 
attempting  to  cut  off  the  competition  of  the  Canadian  firm 

'  Monetary  Timex,  vol.  xxxv,  p.  1144.  '  Ibid.,  p.  924. 

•  Canadian  Mining  Renew,  vol.  xxi,  p.  301. 

*  Iron  and  Coal  Tradea  Rem'  ■),  vol.  lxiii,  pp.  1409-10. 

*  Commercial  and  Fiminti--  t  .iroifide,  vol.  uutY.  n.  fiRS. 

•  Monetary  Times,  vol.  xx..     o.  840. 


..^# 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    «15 

by  dumping  their  surplus  output  in  Canada.*  Moreover, 
while  experts  had  been  consulted  as  to  the  possibility  of 
making  steel  raUs  from  Helen  Mine  ore,  it  had  turned  out 
not  to  be  Bessemer  ore,  and  consequently  ore  had  to  be 
obtained  from  the  Mesaba  Range  in  Minnesota,  and  from 
the  Josephine  Mme,  norm  of  Michipicoten.''  Open-hearth 
furnaces  seemed  necessary  if  the  Helen  Mine  ore  was  to  be 
used,'  or  else  the  ore  would  have  to  be  shipped  abroad  in 
exchange  for  Bessemer  ore.*  Yet  contracts  for  rails  were 
available.  The  Ontario  Government  tendered  a  contract 
for  rails  for  the  Temiskaming  and  Northern  Ontario  Rail- 
way at  $32  per  ton,  but  the  shortage  of  pig  iron,  due  to  the 
fact  ^  that  the  blast  furnaces  were  incomplete,  forced  the 
company  to  decline  the  contract. 

It  seemed  absurd  that  the  Consolidated  Lake  Superior 
Company  should  have  to  close  down  when  $28,000,000  had 
been  spent  on  plants  of  the  best  and  most  modem  character, 
but  it  was  actually  impossible  to  find  enough  money  dur- 
ing this  period  of  financial  stringency  to  pay  off  a  loan  of 
$5,050,000  to  Messrs.  Speyer  and  Company  of  New  York.' 
In  July,  1903,  a  plan  to  issue  $5,000,000  of  thirty-year  four 
per  cent  bonds  failed,  owing,  it  is  said,  to  efforts  of  capi- 
talists connected  with  the  United  States  Stevl  Corpora- 
tion, and  the  plant  was  closed  down,  throwing  3500  men 
out  of  employment.''  Arrangements  were  made  immedi- 
ately for  th?  pftyment  of  the  men  through  the  mediation 
of  the  Ontario  Government.* 

A  reorganization  of  the  company's  finances  was  abso- 
lutely necessary.  As  can  easily  be  seen,  it  was  grossly  over- 
capitalized, with  all  expenditures  made  from  the  proceeds 
of  the  bond  issues.   A  new  company,  the  Lake  Superior 

»  Industrial  Canada,  vol.  m,  p.  235. 

•  Iron  Age,  vol.  lxxi.  May  17,  p.  9.  »  Ihid.,  April  16,  p.  34. 
«  Ibid.,  June  11,  p.  14.  »  Monetary  Times,  vol.  xxvi.  p.  1086. 
«  IM.,  vol.  xxxvii,  p.  380. 

'  Canadian  Annual  Review,  1903,  pp.  512-15. 

*  Monetary  Times,  vol.  xxxvii,  p.  419. 


=1 
•  i 


216    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 


w. 


'il 


li' 


Corporation,  was  formed  with  a  capital  of  $40,000,000 
common  stock,  wliich  was  exchanged  for  the  stock  of  the 
old  company,  in  the  proportion  of  one  share  of  new  stock 
for  two  shares  of  preferred  and  four  shares  of  common 
stock  of  the  old  company.  Income  bonds  to  the  amoimt  of 
$3,000,000  at  5  per  cent,  to  compensate  each  shareholder 
for  the  payment  of  $3  per  share  for  each  share  exchanged, 
and  $10,000,000  of  first  mortgage  5  per  cent  bonds,  which 
were  sold  with  a  stock  bonus  of  30  per  cent,  were  also  is- 
sued.' Mr.  Clergue  was  succeeded  as  general  manager  by 
Mr.  Cornelius  Shields,  who  had  been  general  manager  of  the 
Dominion  Iron  and  Steel  Company.* 

In  1904  arrangements  were  made  for  the  sale  of  the 
Helen  Mine  ore  and  for  the  purchase  of  Bessemer  ore  in 
Minnesota.'  The  Josephine  Mine  was  also  tested  more  care- 
fully.* Contracts  for  rails  and  other  products  began  to 
come  in,  and  by  December  nearly  all  departments  were 
being  fully  operated.' 

The  year  1905  was  one  of  general  rejuvenation.  Iron- 
ore  mining  was  extensive,  and  railroad  building  was  pushed 
forward.'  The  Lake  Superior  Power  Company,  the  last 
to  remain  in  the  hands  of  the  receiver,  was  released  and 
came  under  the  full  control  of  the  Lake  Superior  Company." 
The  car  shops  were  reopened  for  the  repair  of  freight  a'  a 
box  cars  for  the  Canadian  Pacific,  the  Algoma  Central,  and 
the  Temiskaming  and  Northern  Ontario  Railways.*  There 
were  large  orders  for  rails  —  152,000  tons  in  all  —  for  the 
Canadian  Pacific,  Canadian  Northern,  Michigan  Central, 
Grand  Trunk,  and  the  Intercolonial  Railways.*  Contracts 
were  let  for  new  open-hearth  furnaces  of  200  tons'  capac- 
ity, each  to  use  more  Helen  Mine  ore.'°    As  the  steel-rail 

*  Monetary  Times,  vol.  xxxvn.  p.  1181.     »  Ibid.,  vol.  xxxvi,  p.  1384. 

'  Canadian  Mining  Review,  vol.  xxiii,  p.  143.        *  Ibid.,  p.  100. 

'  Monetary  Times,  vol.  xxxvni,  p.  714. 

"  Iron  Age,  vol.  Lxxv,  p.  371. 

^   Monetary  Times,  vol,  XXXIX,  p,  474,  '  Ibid.  p.  19, 

»  Ibid.,  p.  53.  «>  Iron  Age,  vol.  lxxvi,  p.  1168. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    217 

mill  was  using  more  pig  iron  than  was  produced  by  the  char- 
co  !  furnace,  the  output  of  pig  iron  had  to  be  supple- 
mented by  that  of  a  furnace  at  Midland.  In  1906  and  1907 
the  company  built  new  coke  ovens,'  and  decided  to  build 
new  coke  blast  furnaces  and  steel  furnaces  to  keep  the 
finishing  mills  supplied  with  raw  materials.*  New  records 
were  made  in  the  output  of  the  stpel-rail  mill.'  The  year 
19(18  was  less  favorable.  As  railroad  building  was  some- 
what curtailed,  orders  for  rails  were  not  forthcoming  and 
prices  were  low.*  The  company  had  to  close  down  for  a 
time,  but  it  took  the  opportunity  to  improve  the  rail  mill.* 
Late  in  the  year  the  mill  was  set  m  operation  again  to  fill 
a  rush  order  for  rails  for  the  Grand  Trunk  Pacific  Railway .« 
The  coke  blast  furnaces  which  had  just  been  completed 
were  blown  in.^ 

Since  1908  there  has  been  regular  and  energetic  develop- 
ment. In  1909  and  1910  control  of  the  cf>mpany  passed  to 
British  and  Canadian  interests,  and  to  Dr.  F.  S.  Pearson, 
of  New  York.  Additions  of  capital  were  made  for  the  con- 
struction of  plants  to  turn  the  power  to  more  productive 
account.*  Business  was  fairly  good  in  1909  and  1910,'  and 
rails  were  sold  even  to  the  New  York  Central  Raihx)ad. 
While  the  rail  mill  was  pushed  to  its  utmost  capacity,'" 
the  steel  works  received  spec"  '  attention.  The  blast  fur- 
naces were  extended  to  keep  pace  with  the  rail  mill  and 
open-hearth  furnaces."  As  the  new  furnaces  were  de- 
signed to  use  Helen  Mme  ore,  the  company  refused  to  sell 
the  ore.  A  limestone  quarry  in  Michigan  was  purchased 
and  docks  and  ore-handling  machinery  were  installed. '- 


»  Monetary  Times,  vol.  XL,  p.  1318.      »  Iron  Age,  vol.  LXXix.  p.  1732. 

•  Monetary  Times,  vol.  xxxix,  p.  13*4. 

•  tron  Age,  vol.  lxxxi,  p.  1406. 

•  Canadian  Mining  Journal,  vol.  xxix,  p.  489 
'  Iron  Age,  vol.  LXXXli,  p.  707. 
«  Financial  Post,  January  £3,  1909,  p.  11. 
»  Ibid.,  December  24,  1910,  p.  1. 
»  Iron  Age,  vol.  lxxxiii,  p.  1213. 
"  Canadian  Mining  Journal,  vol.  xxxi,  p.  610, 


'  Ibid.,  p.  293. 


w  Ibid.,  July  30, 1910,  p.  9. 


tif 


818    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 


li; 


1!;^ 


In  June,  1910,  the  Cannelton  Collieries  of  West  Virginia 
were  purchased  in  order  to  make  the  company  independent 
in  its  requirements  of  raw  materials.  Coal  areas  of  6000 
acres  were  operated  by  the  Cannelton  Coal  and  Coke  Com- 
pany, whose  stock  is  owned  outright  by  the  Lake  Superior 
Corporation.*  No  less  than  110  new  by-product  Koppers 
coke  ovens  were  built,  and  the  mines  were  worked  vigor- 
ously." In  1911  the  Algoma  Steel  Corporation  built  an 
18-inch  merchant  mill,  a  12-inch  merchant  mill,  to  produce 
track  fastenings,  and  installed  many  other  improvements.* 
Of  $10,000,000  spent  between  1909  and  1911,  $7,300,000 
was  spent  on  the  steel  branch  and  $3,000,000  on  lime- 
stone and  coal  properties.  The  Magpie  Iron  Mine  near 
Michipicoten,  leased  in  1909,  was  purchased  outright  in 
1911.< 

In  1911  and  1912  a  '"^-inch  blooming  mill,  a  28-inch  rail 
mill,  a  350- ton  tiltirst  Jng  furnace  for  the  open-hearth 
department,  three  40-ton  open-hearth  furnaces,  a  500-tou 
blast  furnace,  and  a  coal-handling  plant,  were  added  to  the 
equipment.^  In  1913  the  company  purchased  sixty-three 
acres  of  land  for  proposed  extensions,  which  included  an- 
olher  b'ast  furnace,  another  steel-rail  mill,  an  open-hearth 
plant,  coke  ovens,  blooming  mills,  and  a  merchant  mill,' 
ar.  •  i  storage  facilities  for  limestone  and  pig  iron.  Additional 
open-hearth  furnaces,  the  enlargement  of  the  ore  roasting 
plant  at  the  Magpie  Mine,  and  the  building  of  a  merchant 
mill  for  the  production  of  heavy  structural  steel,  were  com- 
pleted in  1914.^ 

The  Lake  Superior  Corporation  is  to-day  one  of  Canada's 
largest  iron  and  steel  producing  companies.  Besides  being 
the  first  company  to  produce  steel  rails  in  Canada,  it  led 

1  Canadian  Mining  Journal,  vol.  xxxi,  p.  477. 

'  Iron  Age,  vol.  lxxxiii,  p.  1213.  •  Ibid.,  vol.  ucxxix,  p.  101. 

*  Monetary  Times,  vol.  xlvii,  p.  1618. 

'  Iron  Age,  vol.  lxxxix,  p.  101. 

6   yfnnetnry  Timeit..  vol.  L.  pp.  319  and  292. 
'  Ibid.,  vol.  LI,  p.  252. 


THE  RECENT  fflSTORY  OF  THE  INDUSTRY    819 

in  the  production  of  other  articles,  such  as  heavy  and  light 
structural  material.  The  company  has  always  folbwed 
a  policy  of  installing  only  the  best  and  ^ost  ui>-to^ate 
machinery ;  in  fact. it  has  even  taken  the  initiative  m  design- 
ing and  installing  machmery  used  nowhere  else  m  America. 
The  plant  is  operated  so  far  as  possible  by  electric  power, 
of  which  the  corporation's  own  power  plant  supplies  an 
abundance.  Altogether  the  works  at  Sault  Ste.  Mane  are 
one  of  Canada's  largest  enterprises,  and  had  it  not  been 
for  the  financial  failures  of  F.  H.  Clergue,  they  would  no 
doubt  have  had  as  great  success  in  the  past  as  conditions 
seem  to  warrant  us  in  expecting  in  the  future. 

§  6   The  early  development  of  the  Hamilton  Blast  Fur- 
nace Company,  which  was  well  under  way  by  1897,  has 
abeady  been  considered.   In  1899  this  company  and  the 
Ontario  Rolling  MUls  Company  were  amalgamated  as  the 
Hamilton  Steel  and  Iron  Company.   The  finishing  plant 
was  to  furnish  an  outlet  and  market  for  the  less  finished 
product  of  the  other  company.^  The  latter  was  sfcurmg  the 
Ontario  trade  among  foundries,  and  it  had  a  market  even 
m  Quebec,  as  the  iron  produced  had  an  excellent  reputa- 
tion and  the  Ontario  and  Dominion  bounties  were  a  con- 
siderable help  in  marketing  at  proper  prices.^   At  first,  ores 
from  the  I  -^ke  Superior  district  were  used,  but  a  consider- 
able amount  of  ore  was  brought  from  Renfrew  County,  and 
large  quantities  of  ore  were  shipped  from  the  mine  to 
Hamilton.'  In  1899  about  27  per  cent  of  the  ore  used  was 
mined  in  Ontario.*   The  Hamilton  Iron  Mining  Company, 
a  subsidiary,  was  operating  a  deposit  at  Desbarats  on  the 
"Soo"  branch  of  the  Canadian  Pacific  Railway.^  In  1899 
the  Equitable  Mining  and  Developing  Company  wan 

»  Industrial  Canada,  vol.  ii,  p.  331. 

'  Iron  Age,  vol.  lx,  August  5,  p.  H. 

'  Ontario,  Report  of  Bureau  of  Mines,  1908.  p.  197. 

«  Jm/mn/  of  the  Iron  and  Steel  InstUuU.  1900,  no.  1,  p.  453. 

»  Iron  and  Coal  Trades  Review,  vol.  hX,  p-  WM. 


n 


i^srrpw«p?fws'*Bif^PW" 


II! 


820    THE  CVNADIAN  IRON  AND  STEEL  INDUSTRY 

formed  to  mine  iron  ores  of  easterr   'Ontario  on  a  contract 
with  the  Hamilton  Steel  and  Iron  i  ompany.* 

This  new  conipany  soon  dwided  to  build  a  large  steel 
plant  to  use  sonif  of  the  pig  iron  not  suitable  for  foundry 
purposes,  together  with  scrap  iron,  collected  throughout 
western  Ontario.^  Several  15-ton  basic  open-hearth  fur- 
mu'ca  were  built  in  19<X).  After  this  the  concern  flourished.' 
A  new  250-ton  blast  furnace  was  built  in  1907  to  supply 
a  large  amount  of  iron  to  consumers  in  Hamilton.*  The 
production  of  railway  .spikes,  for  which  there  was  a  great 
demand,  was  also  liegim  in  the  .same  year."  The  Hamilton 
Iron  and  Steel  Company  was  formed  to  take  over  the  prop- 
erties of  the  old  company,  and  the  capitalization  was 
increased  from  $1,513,000  to  $3,000,000."  Since  1907  the 
company  has  extended  its  .spike  mill,^  and  has  built  new 
bolt  and  bar  mills.*  In  1910  $400,000  spent  on  a  process  for 
treating  ores  reduced  the  cost  of  smeltmg  to  seventy-five 
cents  per  ton.» 

In  1910  the  Steel  Company  of  Canada  wa"  formed  to 
amalgamate  the  Hamilton  Iron  and  Steel  Company  with 
the  Montreal  Rolling  Mills  Company,  the  Canada  Screw 
Company,  the  Dominion  Wire  Manufacturing  Company, 
and  the  Canada  Bolt  and  Nut  Company.  In  1911  the  in- 
creased demands  for  the  products  of  the  company  required 
the  addition  of  machinery,  equipment  at  various  plants, 
a  blooming  mill,  a  rod  and  bar  mill  at  Hamilton,  and  two 
more  50-ton  open-hearth  furnaces,  which  were  put  in  opera- 
tion in  the  autumn  of  1912.1" 

In  1911  the  company  had  to  meet  severe  competition 
from  the  United  States.  Although  the  demand  for  the 
output  was  large,  an  abnormal  amount  of  iron  was  sup- 

•  Monetary  Times,  vol.  xxxil,  j    -    J. 

'  Iron  Age,  vol.  lxii,  Decomlicr  la,  p.  12. 

•  Induntrial  Canada,  vol.  ii,  p.  331.  *  Ibid.,  vol.  xi,  p.  815. 

•  Ibvl.,  vol.  XII.  p.  797.  «  Iron  Age,  vol.  lxxxi.  p.  29.S. 

'  Industrial  Canada,  vol.  ix,  p.  38.      «  hon  Age.  vol.  lxxxiv,  n.  149. 
'  Monetary  limea,  vol.  xuv,  p.  IIU.     'o  Ibid.,  vol.  xlviii,  p.  1625. 


-lijrf 


j 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    281 

plied  by  United  States  producers  at  exceptionally  low 
prices.  The  price  of  bars  was  so  low  that  only  the  lantest 
plants  in  the  United  States  could  produce  them  at  a  cost 
which  would  give  even  a  meager  margin  of  profit.   Vnven 
of  pig  iron  were  still  worse.  As  pig  iron  was  sold  l)clow  the 
average  furnace  cost.  few.  if  any.  American  furnaces  made 
money,  and  the  prici's  for  export  to  Canada  were  cut  1h-1ow 
those  for  the  American  market.  The  company  also  had  to 
face  conditions  created  by  the  fact  li.at  u-on  used  for  the 
manufacture  of  agricultural  machinery  enters  Canada  al- 
most free  of  duty.   This  practically  prohibited  implement 
makers  from  purchasing  any  Canadian  iron.   In  spite  of 
this  difficulty,  the  company,  by  selling  goods  at  a  small 
profit  (in  comparison  with  miiiS  which  made  little  ( '  no 
moaey),  was  able  to  run  the  plant  at  full  capacity  a  ..  i- 
secure  the  greatest  economy.  The  improvements  and  aaa. 
tions  permitted  tb.>  production  of  bars  at  a  cost  lower  than 
before.^   In  1913  a  wire  plant,  capable  of  producmg  150 
tons  a  day,  was  built  at  Fort  William,  and  nail  works  are 
now  being  built  at  the  same  place.' 

Of  the  constituent  companies  entering  the  Steel  Company 
of  Canada  the  second  in  import  iicc  was  the  Montreal 
Rolling  Mills  Company,  a  long-established  firm,  which 
o^Tied  and  operated  three  plants  in  the  heart  of  the  manu- 
facturing district  of  Montreal. »  In  1903  this  company,  find- 
ing itself  in  a  satisfactory  condition,"  purchased  the  entire 
properties  of  the  PiUow-Hersey  Comp.my  of  Montreal  for 
$600,000,^  and  built  a  new  wire-nail  plant  with  an  output 
of  100.000  kegs  of  naUs  per  year.«  In  1906  the  property  of 
the  Hodgson  Iron  and  Tube  company  was  purchased,  and 
a  butt  weld  pipe  mUl  was  constructed.'  The  company  has 

>  Annual  P      rt,  191«.        '  Iron  Age,  vol.  xc:.  p.  1626. 

•  Ames's  Circular.  November  27.  1911. 
«  Monetary  Timet,  vol.  xxxvi,  p.  1049. 
6   Iron  Age,  vol.  i-xxi.  May  2».  p.  20. 

•  Monetary  Times,  vol.  xxxvii,  p.  533. 
'  Iron  Age,  vol.  lxxvi,  p.  268. 


I  in 


» 


•  III 
•I 


'.    ',  I 


ii 


I 


222    THE  CANADIAN  IRON  AND  STEEL  INJ       TRY 

excellent  shipping  facilities  by  rail  and  water  and  the  plant 
and  buildings  are  all  modem  and  well  equipped.' 

The  plant  of  the  Canada  Screw  Company  is  located  on 
eight  acres  in  the  center  of  the  city  of  Hamilton.  It  has 
all  necessary  railway  connections,  modem  buildings  and 
equipment.  The  plant  of  the  Dominion  Wire  Manufac- 
turing Company,  of  Lachine,  Quebec,  a  suburb  of  Mon- 
treal," built  in  1906,  comprises  an  oi^en-hearth  fumace,  a 
blooming  mill,  and  a  combined  rod  and  wire  mill.'  The 
Canada  Bolt  and  Nut  Company,  established  in  1910,  was 
a  consolidation  of  companies  owning  plants  in  Toronto, 
Brantford,  Bemville,  and  Gananoque. 

AU  the  plants  of  the  Steel  Company  of  Canada  are 
modem,  well  equipped,  and  situated  at  strategic  transport- 
ation points.  The  output  consists  of  pig  iron,  open-hearth 
steel,  bar  iron  and  steel,  shapes,  forgings,  locomotive  and 
car  wheels,  bolts,  nuts,  rivets,  horseshoes,  wrought-iron 
pipe  and  fittings,  wire  and  cut  nails,  tacks  and  screws, 
wire,  etc.  With  the  exceedingly  efficient  management  not 
only  of  the  general  enterprise,  but  also  of  the  various 
branches,  the  future  of  the  company  seems  assured.* 

§  7.  Another  important  advance  was  made  in  the  Ca- 
nadian iron  industry  by  the  Drammond  interests  of  Mon- 
treal when,  in  1899,  the  Canada  Iron  Fumace  Company 
accepted  Midland's  offer  of  Ji550,000,  along  with  ten  years 
of  tax  exemption,  if  the  company  would  build  a  blast  fur- 
nace  at  Midland.  Midland  was  regarded  as  a  good  site, 
since  it  had  the  best  harbor  on  Georgian  Bay,  where  ore 
can  be  secured  at  low  cost  from  Hastings  County  or  by 
water  from  Lake  Superior  ore  mmes,  such  as  the  Helen 
Mine.*   The  capital  of  the  Canadian  Iron  Fumace  Com- 


•  Ames's  Circular.  November  27,  1911. 

•  Monetary  Times,  vol.  xl,  p.  195. 

•  Ames's  Cirexdar,  November  27,  1911. 

»  Iron  Age,  vol.  Lxm,  February  23,  p.  15. 


Ibid. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    223 

pany  was  increased  from  $300,000  to  $1,000,000.1  a  fur- 
nace of  125  tons'  daily  capacity  was  built  on  a  splendid 
water-front  property  opposite  the  town.  Docks  were  fitted 
up  with  modem  ore  elevators  to  deliver  materials  directly 
to  the  stock  house.* 

It  had  been  the  original  intention  of  the  company  to 
manufacture  charcoal  iron,  to  be  used  in  the  manufacture 
of  car  wheels  in  the  works  controlled  by  those  interested  in 
the  Canadian  Iron  Furnace  Company,*  but  cordwood  rose 
so  rapidly  m  price  that  the  management  soon  decided  to 
purchase  Connellsville  coke  as  fuel.   A  large  quantity  of 
the  Helen  Mine  ore  was  used  for  some  years,  but  more  re- 
cently the  product  has  been  Bessemer  iron  made  from  ore 
secured  from  the  Lake  Superior  region,  the  Mineral  Iron 
Range  Mming  Company  at  Bessemer,  Hastings  County,* 
and  from  the  Radnor  Mine,  Renfrew  County,  Ontario.* 
For  the  time  prospects  looked  so  bright  that  in  1909  to 
1910  a  new  250-ton  blast  furnace  was  built  at  Midland,^ 
but  the  company  has  since  got  into  financial  diflBculty,  due 
partially  to  the  second  furnace  overreaching  opportunities. 
The  second  venture  of  the  Drummond  interests  was  the 
purchase  of  the  plant  of  the  Londonderry  Iron  Company  in 
1902.    The  Londonderry  works  had  been  closed  down"  in 
1898  because  modem  discoveries  and  inventions  had  ren- 
dered the  plant  obsolete,  and  it  was  no  longer  profitable  to 
carry  on  the  works  m  their  old  form.'   In  1899  the  plant, 
including   mmeral  lands,  blast  furnaces,   a  rolling   mill, 
foundries,  coke  ovens,  a  railway  and  rolling  stock,  machin- 
ery, and  the  Chignecto  Colliery  at  Maccan  were  sold  to 

>  Monetary  Times,  vol.  xxxiv,  p.  360. 
'  Industrial  Canada,  vM.  u,  p.  330. 

•  Iron  Age,  vol.  Lxxiii,  February  23,  p.  15. 

•  Ontario.  Report  of  Bureau  of  Mines,  1908,  pp.  197-98. 
'  Jeans,  op.  cit.,  p.  108. 

•  Canadian  Mining  Journal,  vol.  xxxi,  p.  610. 
'  Hid.,  vol.  xviii,  p.  56. 

•  Monetary  Times,  vol.  \yxm,  p.  618. 


HI: 


824    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

Mr.  H.  S.  Holt  for  $153,000. »  Meanwhile  the  foundry  was 
operated  by  Drummond,  McCall  and  Company,  for  the 
manufacture  of  water  pipe.  As  the  Drummond  people 
were  looking  for  a  suitable  site  in  Nova  Scotia  for  such  a 
foundry,  they  decided  to  purchase  the  whole  plant,*  and 
in  1902  formed  the  Londonderry  Iron  and  Mining  Company 
to  acquire  these  properties  and  t6  enter  upon  the  manu- 
facture of  a  high-grade  foundry  pig  iron.' 

In  1903  the  plant  was  remodeled  and  placed  in  first-class 
shape.*  One  furnace  was  completely  rebuilt.'  An  excel- 
lent laboratory,  repair  shops,  car  shops,  machine  room, 
blacksmith  forge,  office  buildings,*  and  a  new  casting 
house  were  added,  and  the  cold  blowing  engines  were  fully 
repaired.  The  second  and  smaller  furnace  was  pulled  down.' 

In  1904  the  furnace  was  put  in  operation,^  and  ore  de- 
posits at  Torbrook  were  purchased  and  shipments  to  Lon- 
donderry begun."  As  a  mixture  of  local  and  Torbrook  ore 
b  reasonably  free  of  phosphorus  and  sulphur,  and  as  the 
Torbrook  red  hematites  often  contain  enough  limestone  to 
be  self-fluxing,  the  combination  produced  splendid  foundry 
iron.'"  In  1905  a  new  company,  the  Annapolis  Iron  Min- 
ing Company,  was  incorporated  to  operate  the  Torbrook 
Mines,  and  sell  the  output  to  the  Londonderry  comf>any. 
Practically  the  same  interests  were  concerned  in  the  two 
companies." 

The  furnace  and  plant  were  out  of  operation  late  in  1907, 
owing  to  the  lack  of  supply  of  coke  and  the  cutting  of 

'  Monetary  Times,  vol.  xxxiii,  p.  618. 

'  Iron  Ago,  vol.  lxx,  October  i,  p.  16. 

•  Canada,  Report  on  Mining  and  Mftallurgical  Indiutriea,  p.  427. 

*  Monetary  Times,  vol.  xxxvi,  p.  487. 
»  Canadian  Mining  Manual,  1903,  p.  47. 

Canadian  Mining  Journal,  vol.  xxviii,  p.  71. 

Ibid. 

Monetary  Times,  vol.  xxxvii.  p.  903. 

Canadian  Mining  Review,  vol.  xxui,  p.  804. 
"•  Ibid.,  vol.  XXVIII,  p.  72. 
»  Canada.  Report  of  Mining  and  Metallurgical  Industrie*,  pp.  524-26. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    225 

prices  in  pig  iron,»  but  the  foundry  operations  were  re- 
newed m  1909.2  jn  1909  ^jjg  furnace  using  some  ore  from 
Bathurst,  New  Brunswick,  was  started  up  again.*  The 
Drummond  people  had,  in  the  mean  time,  developed  the 
iron  mmes  in  Gloucester  County,  near  Bathurst,  by  instal- 
ling a  plant  to  raise  2000  tons  per  day,  and  by  building  a 
railway  connecting  the  mines  with  the  Intercolonial  Rail- 
way at  Newcastle.*  Smce  a  deposit  of  coal  was  found  near 
the  mines,"  the  erection  of  a  blast  furnace  at  Bathurst  was 
discussed.*  The  ore  beds  were  mined  and  contracts  were 
made  for  the  shipment  of  60,000  tons  in  1912,  and  200,000 
tons  in  1913,  to  Philadelphia.  In  1912  $100,000  was  spent 
on  a  large  concentrator  of  700  tons*  capacity,  an  ore-crush- 
ing plant,  engmes,  and  a  stock-piling  equipment.'' 

Smce  1910  the  Londonderry  Furnace  has  not  been  in 
operation,*  but  the  company  developed  its  Torbrook 
Mmes  by  installing  mining  and  crushing  machinery  and  by 
building  shipping  docks  for  this  ore  at  Port  Wade,  Nova 
Scotia,  with  leading  facilities  of  2000  tons  per  hour.  The 
Torbrook  Mines  were  closed  down  in  1911,  but  ore  from 
ti-j  stock  pile  was  concentrated  and  cargoes  shipped  as 
prices  improved,'  and  the  mines  were  reopened  in  1912. «» 

Meanwhile,  the  Drummonds  and  allied  interests  were 
involved  'n  several  other  projects.  The  Canadian  Iron  and 
FoudH  -mpany  had  operated  car-wheel  shops  and  pipe 
foun  St.  Thomas  and  Hamiltt  jx,  Ontario,  at  Lon- 

dond  -ova  Scotia,  and  at  Montreal  and  Three  Rivers, 

'  Canadian  Mining  Journal,  vol.  xxix,  p.  96. 
'  Industrial  Canada,  vol.  vni,  p.  713. 

•  Canadian  J/tntn ;  Journal,  vol.  xxix,  p.  638. 

•  Ibid.,  vol.  xxv.u,  p.  540. 

»  Monetary  Tunei,  vol.  XLiv,  p.  1015. 

•  Industrial  Canada,  vol.  viii,  p.  684. 

'  New  Bninawick.  Revort  oj  Crown  Land  Department,  191«.  pp.  xxiv- 
xxvii. 

•  Monetary  Timet,  vol.  xlix,  p.  110. 

'  Canadian  Mining  Journal,  vol.  xxxn,  p.  48. 

*"  Nova  Scotia,  Report  o/  Department  of  Minee,  1918,  pp.  173-74. 


m 


226    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

Quebec.'  A  pipw  foundry  and  CuT-wheel  shop  had  been 
built  at  Fort  William  to  take  care  of  the  western  business 
in  piping  and  car  wheels.*  This  plant  was  extended  in  1912 
to  permit  the  manufacture  of  more  car  wheels  for  the  new 
Port  Arthur  plant  of  the  Canadian  Car  and  Foundry  Com- 
pany.' In  1912  the  plant  at  Three  Rivers  was  entirely  re- 
built to  manufacture  seventy-five  tons  of  water  pipe  and 
twenty-five  tons  of  castings  per  day.* 

The  Radnor  Furnace  at  Radnor  Forges,  Quebec,  was  in 
blast  until  1911.  Charcoal  was  produced  at  ovens  at  Rad- 
nor Forges  and  Grand  Piles,  Quebec.  John  McDougall 
and  Company,  allied  interests,  have  operated  a  furnace 
at  Drummondville,  Quebec.  Only  charcoal  iron  has  been 
made  by  these  small  Quebec  furnaces.  The  output  has  been 
sold  to  the  Canadian  Pacific  Railway,  the  Rhodes  Curry 
Company,  and  the  Canada  Iron  and  Foundry  Company 
for  the  manufacture  of  car  wheels  and  cast-iron  pipe.' 

In  1908  practically  all  these  plants  were  purchased  by 
the  Canada  Iron  Corporation.  In  1912  this  new  corpora- 
tion reported  that "  the  business  of  the  iron  foundries  shows 
a  constant  and  very  healthy  growth  and,  despite  the  effects 
of  American  competition  on  the  profits  of  1911  to  1912,  a 
yearly  tonnage  production  b  now  obtained  from  all  de- 
partments that  insures  a  permanent  supremacy  of  the  cor- 
poration in  its  sp>ecial  field  of  operation  from  foundry  pig 
iron  to  the  finished  product  of  railway  and  tramway  car 
wheels,  cast-iron  water  pipe  and  gas  pit>es,  and  general 
castings.  The  demand  for  this  corporation's  products  is 
increasing  daily,  necessitating  still  further  extensions  to 
plants,  especially  at  western  points,  to  enable  pace  being 
kept  with  the  general  expansion  of  the  country.  The  cor- 
poration occupies  a  position  to  cope  with  and  take  advan- 


*  Monetary  Times,  vol.  xli,  p.  8185. 

*  Iron  Age,  vol.  lxxx,  p.  367.  •  Ibid.,  vol.  xc,  p.  228. 

*  Canadian  Mining  Journal,  vol.  xxxii,  p.  ■.  iS. 

»  Canada.  Report  on  Mining  and  Metallurgieai    ndw  'net^  pp.  472-7S. 


m 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    «27 

tage  of  the  growing  trade  of  Canada."  '  Nevertheless,  the 
heavy  bonded  debt  of  the  Canada  Iron  Corporation  forced 
it  into  insolvency  in  1913,  and  most  of  the  plants  have  been 
closed  down  pending  reorganization. 


§  8.  One  of  the  best-known  steel  firms  in  Canada  during 
the  past  decade  and  a  half  is  the  Montreal  Steel  Works, 
which,  in  1913,  was  the  largest  producer  of  steel  castings  in 
Canada.'^  As  we  have  seen,  this  company  had  been  es- 
tablished as  early  as  1883.'  The  business  went  on  very  suc- 
cessfully, sales  were  almost  always  good,  earnings  were 
high,  dividends  '.^ore  satisfactorily  paid  from  time  to  time, 
and  a  considerable  surplus  was  piled  up.  The  depression 
of  1907  to  1908  was  a  somewhat  adverse  factor,  but  not 
altogether  dangerous.*  In  1911  the  plant  consisted  of  two 
basic  open-hearth  furnaces  manufacturing  thirty  tons  of 
steel  daily  from  British  pig  iron,  Canadian  scrap  iron,  and 
some  Lake  Superior  ore."  In  1912  a  modem  steel-castings 
plant  was  built  at  Longue  Point,  Montreal,  to  increase  the 
output  of  steel  castings  for  the  Canadian  Car  and  Foundry 
Company,*  as  well  as  for  the  general  market  of  the  country.' 

In  1906  the  Ontario  Iron  and  Steel  Company  was  in- 
corporated with  a  capital  of  $500,000  to  build  a  steel-cast- 
ings plant  and  rolling  mill  at  Welland,  Ontario,  where  na- 
tural gas,  electric  power,  and  good  transportation  facilities 
are  obtainable.^  A  plant,  including  basic  open-hearth  fur- 
naces, rolling  mills,  and  a  small  steel  foundry  to  produce 
steel  castings,  rails,  bars,  angles,  skelp,  etc.,  from  pig  iron 
bought  on  the  open  market,  was  built  in  the  years  1907  to 
1908.»  In  1911  the  Montreal  Steel  Works  and  the  Ontario 


'if 

■i 


'  Annual  Report,  1912.  *  Monetary  Timet,  vol.  XLVin,  p.  4626. 

'  Canada,  Report  on  Mining  and  MctaUurgiccd  Industries,  p.  493. 

*  Financial  Post,  Jdy  3, 1909,  p.  8. 

*  Canada,  Report  on  Mining  and  Metallurgical  Industries,  p.  4  '3. 

*  Monetary  Times,  vol.  xlviii,  p.  2626.  '  Ibid.,  vol.  xiv,  p.  837. 

'  Canada,  Report  on  Mining  and  Metallurgical  Industries,  pp.  335-36. 
«  Ontsri«,  H^r^rt  of  Bur.-av  of  Mine4.  1908,  p.  199. 


!f' 


iji 


r 


828    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

Iron  and  Steel  Company  were  amalgamated  as  the  Cana- 
dian Steel  Foundries. 

Each  of  these  companies  had  made  sales  to  the  increasing 
number  of  car-building  firms  in  Canada.  The  rapid  ex- 
pansion of  car  building,  following  the  increase  of  traflSc  and 
the  expansion  of  Canada's  railway  net,  involved  a  large  de- 
mand for  steel  castings  and  car  wheels.  When,  therefore, 
the  Canada  Car  and  Foundry  Company  was  formed  to 
amalgamate  the  Dommion  Car  Company,  the  Canada  Car 
Company,  and  the  Rhodes  Curry  Company,  which  con- 
cerns together  produced  in  1909  no  less  than  85  per  cent 
of  the  cars  built  in  Canada,  it  secured  control  of  the  Cana- 
dian Steel  Foundries  mentioned  nbove.  Thus,  the  Canada 
Car  and  Foundry  Company  consists  of  an  important  fin- 
ishing industry  and  a  successful  company  producing  pri- 
mary products. 

§  9.  Besides  these  more  important  iron  and  steel  enter- 
prises, we  must  consider  the  operations  of  Sir  William  Mac- 
Kenzie  and  Sir  Donald  Mann,  in  mming  iron  ore  at  Ati- 
kokan,  'vest  of  Port  Arthur,  and  in  manufacturing  iron 
products  in  Port  Arthur. »  Port  Arthur  agreed  to  subscribe 
to  $200,000  worth  of  bonds  of  the  Atikokan  Iron  Com- 
pany, to  provide  it  with  a  free  site  of  forty  acres,  worth 
$25,000,  to  give  it  a  twenty-year  tax  exemption,  to  close 
certain  streets,  and  to  give  a  free  right  of  way  for  a  Ca- 
nadian Northern  Railway  spur  track.  In  return,  it  was 
to  have  a  representative  on  the  board  of  directors,  and  the 
head  office  was  to  be  at  Port  Arthur.'  This  new  iron  com- 
pany was  supplemented  by  another  company,  the  Cana- 
dian Coal  and  Ore  Dock  Company,  which  built  coal  and 
ore  docks  capable  of  storing  200,000  tons  of  coal  and  100,- 
000  tons  of  ore.* 

In  1906  to  1907  the  blast  furnace  and  other  parts  of  the 

>  Iron  Age,  vol.  Lxvn.  May  30,  p.  15.       »  Ibid.,  vol.  lxxv,  p.  S17. 
»  Maiiciafji  Times,  vol.  sxxvni,  p.  1151. 


THE  RECENT  fflSTORY  OF  THE  INDUSTRY    229 


plant  were  built.  The  mine  was  quipped  with  high-class 
machinery,  and  connected  with  the  Canadian  Northern 
Railway  by  a  six-mile  spur  line.'  Since  the  ore  was  some- 
what sulphurous  and  needed  roasting,  a  roasting  furnace 
was  added.*  The  installation  of  the  blast  furnace  at  Port 
Arthur  was  very  costly  because  a  large  portion  of  the  cost 
was  sunk  in  securing  a  suitable  foundation  for  docks,  coke 
ovens,  and  the  furnace.  The  point  chosen  for  building  was 
low  and  marshy,  really  a  deposit  of  a  great  depth  of  al- 
luvial mud,  carried  down  by  the  Kaministikwia  River. 
The  company  decided  to  construct  its  plant  over  the  bay 
rather  than  dredge  a  channel  to  their  docks.'  One  hundred 
coke  ovens  were  built  on  a  pier  nmning  out  to  deep  water. 

In  September,  1907,  the  furnace  was  put  in  operation,* 
and  in  November  2000  tons  of  pig  iron  were  shipped  to 
Sault  Ste.  Marie.'  Satisfactory  results  were  obtained  from 
the  furnace,  which  produced  100  tons  of  excellent  pig  iron 
per  day  from  Canadian  ore.' 

Since  the  industrial  depression  of  1907  to  1908  fell  with 
special  weight  on  most  of  the  iron  and  steel  interests,  the 
Atikokan  Company  had  entered  on  its  production  at  a 
most  unfortunate  time.  Instead  of  piling  up  stocks  of  pig 
iron,  the  comptmy  closed  down  the  plant  imtil  conditions 
should  be  less  adverse.'  It  had  been  expected  that  the 
works  would  start  up  in  1908,  but  as  time  passed  on  with- 
out the  renewal  of  operations,  and  as  fixed  charges  could 
not  be  met,  MacKenzie  and  Mann  asked  for  a  winding-up 
order,*  which  was  withdrawn  when  the  shareholders  got 
sufficient  capital  to  pay  the  claims.' 

Under  the  new  management ""  of  J.  D.  Fraser,  of  the 


•  Monetary  Times,  vol.  xxxix,  p.  982. 

•  Ontario,  Report  of  Bureau  of  Mines,  1908,  p.  69. 

•  Industrial  Canada,  vol.  vin,  p.  95.        *  Itdd. 
'  Iron  Age.  vol.  ucxx,  p.  IMS. 
'  Ibid.,  vol  Lxxxi,  p.  845. 

•  Ibid.,  vol.  Lxxxv,  p.  291. 

"•  Ontario,  Report  of  Bunati  of  Mines,  1909,  p.  84. 


•  Ibid.,  p.  699. 

*  Ibid.,  vol.  Lxxxii.  p.  774. 


230    THE  CANADIAN  IRON  AND  STEEL  INDT  STRY 

Dominion  Iron  and  Steel  Company,'  the  iron  plant  was 
considerably  overhauled  after  eighteen  months  of  disuse 
and  many  improvements  were  installed.*  With  prices  for 
iron  favorable  and  orders  coming  in,'  the  plant  was  re- 
opened in  August,  1909.*  In  1910  more  ore  was  roasted 
than  was  used,  and  some  of  it  was  soUl.^  In  1911  a  large 
cast-iron  pipe  and  car-wheel  foundry  was  added  to  em- 
ploy much  of  the  pig  iron  produced  at  the  furnace,  and  the 
enlargement  of  the  furnace  or  the  building  of  a  second 
blast  furnace  was  seriously  considered.'  In  191S  the  firm 
decided  to  build  a  wedge-type  roasting  furnace.*  As  early 
as  1906  the  erection  of  steel  works  was  contemplated,* 
and  in  1912  there  was  talk  of  a  $5,000,000  steel  plant  in- 
cluding blast  furnaces,  rolling  mills,  steel-rail  mills,  mer- 
chant mills,  bar  mills,  ore  and  coal  docks,  etc.,  evidently 
to  make  use  of  ore  from  both  the  Atikokan  Range  and  the 
Moose  Mountain  Range,  but  as  yet  nothing  of  this  nature 
has  been  accomplished.' 

In  1905  the  vast  deposits  of  iron  ore  at  Moose  Moun- 
tain, Ontario,  amounting  to  some  100,000,000  tons  of  fair 
quality  magnetite,  low  in  phosphorus,  and  of  excellent 
furnace  texture,'"  were  sold  to  MacKenzie  and  Mann  and 
American  interests."  Since  the  Canadian  Northern  Rail- 
way gave  a  direct  connection  with  Lake  Huron  or  Georgian 
Bay,  some  eighty  miles  away,  the  likelihood  of  profitable 
results  from  raining  seemed  good.  Iron  ore  could  be  shipped 
cheaply  to  the  Lake;  the  water  route  to  Lake  Erie  would  be 
shorter  than  from  Minnesota,  and  the  navigation  of  the 
"  Soo  "  locks  would  be  avoided. ^'^ 

•  Canadian  Mining  Journal,  vol.  xxx,  p.  45. 
'  Iron  Age,  vol.  lxxxiv,  p.  277. 

•  Canadian  Mining  Journal,  vol.  xxx. 

•  Iron  Age,  vol.  lxxxiii,  p.  491. 

•  Canadian  Mining  Journal,  vol.  xxxi,  p.  234. 

•  Iron  Age,  vol.  lxxxvi,  p.  1138.  '  Ibid.,  vol.  xr*.  p.  1339. 

'  Ibid.,  vol.  Lxxvi,  p.  1168.       »  Canadian  Engineer,  vol.  xx,  p.  332. 
w  Mineral  Indaatrj,  1911,  p.  398.  "  Iron  Age,  vol.  lxxx,  p.  1150. 

"  Canada,  tUtion  .i«  Mimng  and  Metallurgical  Industnea,  p.  318. 


rr?' 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    231 

Before  shipment  to  the  United  States  was  finally  de- 
cided upon,  MacKenzie  and  Mann  made  Toronto  a  pro- 
posal to  build  a  steel  plant  at  that  city.  In  1907  they 
stated  that  they  would  like  to  smelt  1200  tons  *  of  Moose 
Mountain  ore  at  Toronto  daily,  provided  that  350  acres 
of  Ashbridge's  Marsh,  which  was  regarded  as  a  suitable 
location  for  the  plant,  convenient  for  laying  down  coal  or 
coke,''  were  granted  them.'  They  proposed  to  build  blast 
furnaces  of  large  capacity,  steel  mills,  and  mill"}  for  the 
manufacture  of  billets,  rolled  plates,  bar  iron,  and  other 
products  for  export.*  Because  of  the  refusal  of  the  city  to 
grant  the  area  demanded,  and  other  adverse  factors,  such 
as  money  stringency  and  industrial  depression,'  the  pro- 
ject for  a  steel  plant  in  Toronto  was  abandoned,  and  the 
ore  was  shipped  to  the  United  States.* 

§  10.  The  same  duty  that  had  hampered  the  shipment 
of  coal  from  Nova  Scotia  to  New  England  after  1897  ap- 
plied also  to  charcoal,  and  the  Rathbum  people  of  Des- 
eronto,  who  had  previously  been  shipping  charcoal  to  De- 
troit, found  that  they  could  no  longer  sell  profitably  in  the 
Detroit  market,  and  as  a  result  seventeen  large  kilns  were 
idle.^  Therefore,  in  1898  a  blast  furnace  was  built  at  Des- 
eronto  for  the  manufacture  of  charcoal  iron.*  It  was  put 
in  operation  in  1899,"  and  was  continually  in  blast  until 
1902.  Charcoal  was  supplied  from  the  Rathbum  kilns  and 
retorts  at  Deseronto."*  Ores  from  Lake  Superior  districts 
and  from  Bessemer,  Ontario,  were  used.  Fluxing  materials 
from  the  Bay  of  Quinte  Railway  quarries  were  available 

'  Ontario,  Report  of  Bureau  of  Mines,  1908,  p.  199. 
'  Iron  Age,  vol.  Lxxviii,  p.  1014. 

*  Canadian  Mining  Journal,  vol.  xxviii,  p.  482. 

*  Iron  Age,  vol.  lxxx,  p.  1085.  »  Ibid.,  vol.  Lxxxi,  p.  SftS. 

*  Canadian  Engineer,  vol.  xvii,  p.  43. 
'  Iron  Age,  vol.  uc,  September  9,  p.  8. 

*  Canadian  Enjineer,  vol.  vi,  p.  285. 

*  Canada,  Report  on  Mining  and  Metallurgical  Industries,  pp.  321-22. 
>°  Industrial  Canada,  vol.  ii,  p.  333. 


i^ 


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232    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

at  low  cost.'  The  iron  was  used  almost  entirely  for  the 
manufacture  of  malleable  castings  and  car  wheels  and  for 
general  foundry  work,  where  exceptional  strength  and 
density  are  required.  Some  of  it  has  been  sold  on  the 
Continent  and  in  Great  Britain.* 

In  1906  the  company  found  increasing  difficulty  in  get- 
ting wood  at  reasonable  prices.  The  blast  furnace  had  to 
be  closed  down  until  some  repairs  had  been  made  and  the 
plant  somewhat  enlarged  to  permit  the  use  of  coke  as  fuel.» 
Since  hardwood  limits  were  soon  secured  m  Hastings 
County  *  and  since  the  furnace  was  modeled  on  charcoal 
furnace  principles,  charcoal  has  been  used  most  of  the 
time.  A  special  low  sulphur  coke  from  the  Connellsville 
district  has,  however,  been  used  on  occasion.*  In  1911,  a 
year  of  low  prices,  the  company  had  no  difficulty  in  market- 
ing its  small  production;  since  charcoal  iron  always  com- 
mands a  good  price  and  has  a  ready  sale.' 

§  11.  Ferro-products  and  pig  iron  and  steel  have  been 
produced  in  Canada  by  electrical  processes  in  more  recent 
years.  The  possibility  of  economically  producing  steel  and 
iron  by  this  method  has  been  a  matter  of  recent  discussion  and 
experiment,  and  the  process  is  still  in  the  experimental  stage. 

In  1907  the  Electro-Metals  Company  of  Welland,  On- 
tario, was  formed  Ho  manufacture  pig  iron,  high-grade 
steel  and  steel  castings,  and  ferro-products  in  a  SOOO  horse- 
power furnace  using  power  furnished  by  the  Ontario  Power 
Company."  The  electric  furnace  at  the  "Soo"  has  not 
been  regularly  m  operation  since  the  trial  tests  in  1907. 
In  that  year  the  Electric  Furnace  Products  Company  of 

>  Iron  Age,  vol.  lx,  Stptember  9,  p.  285. 

•  Iiuiuitricd  Canada,  vol.  ii,  p.  333. 

»  Ontario,  Report  of  Bureau  of  Mines.  1908,  p.  197. 

*  Iron  Age,  vol.  lxxdc,  p.  1584. 

'  Ontario,  Report  of  the  Bureau  of  Mints,  1908,  p.  314. 

'  Personal  Correspondence. 

'  Iron  Age,  vol  lxxix,  p.  1061.  «  Ibid.,  p.  1665. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    933 

Pittsburg  secured  the  promise  of  a  ten-year  tax  exemption, 
and  a  fixed  assessment  of  $25,000  for  a  further  ten  years, 
from  Chippewa,  Ontario,  and  purchased  nineteen  acres  and 
promised  to  build  a  $50,000  plant  for  the  manufacture  of 
structural  steel.'  In  1909  the  Electric  Steel  Company  was 
formed  to  establish  a  steel  plant  at  Welland.*  In  1904  Mr. 
J.  E.  Evans,  of  Belleville,  had  begun  to  experiment  on  the 
use  of  the  titaniferous  iron  ores  of  Canada,  and  devised  an 
electric  furnace  to  produce  tool  steel  of  distinctly  superior 
character.  In  1909  Dr.  Stansfield,  of  McGill  University, 
formed  a  partnership  with  Mr.  Evans,  whose  process,  when 
improved,  was  called  the  Evans-Stansfield  Direct  Elec- 
tric Smelting  Process.  A  furnace  was  built  at  McGill  Uni- 
versity with  a  daily  capacity  of  one  half  ton  of  steel.  This 
provides  for  the  direct  manufacture  of  tool  steel  from  pre- 
viously useless  titaniferous  ores,  which  comprise  more  than 
half  of  the  known  Canadian  ores.*  In  1913  the  Moffat 
Irving  Steel  Works  of  Toronto  were  built  to  produce  steel 
C".''tings  by  electric  process.* 

ivlost  of  the  electric  companies  produce  chiefly  ferro- 
products,  such  as  ferro-silicon,  ferro-phosphorus,  and  ferro- 
titanium.  All  of  these  are  being  made  by  the  Electric  Re- 
duction Company  of  Buckingham,  Quebec.  Ferro-silicon 
and  ferro- titanium  have  been  made  at  Welland.  In  1912, 
7834  shor'.  tuuo  of  'erro-products  constituted  the  output 
of  electric  fumact  plants.  In  the  calendar  year  19  li  tue 
imports  of  ferro-products  were  19,810  tons,  worth  $469,- 
884.*  The  Welland  plants  probably  produce  at  a  higher 
cost  than  American  plants.  Indf  i  "n  the  face  of  the  duty 
of  $2.50  on  ferro-products,  American  firms  are  able  either 
to  imdersell  Canadians  or  to  force  them  to  sell  at  most 
discouraging  pnces.* 

•  Iron  Age,  vol.  lxxxiv,  p.  991 .       '  Industrial  Canada,  vol.  x,  p.  10. 

•  Canadian  Mining  Journal,  vol.  lotxii,  pp.  591-92. 

•  Iron  Age,  vol.  xciii,  p.  134. 

'  Canada,  Production  of  Iron  and  Steel  in  Canada,  1912,  p.  88. 
"  United  States.  Tari^  Ueariv.gs,  1909.  p.  1480. 


«S4    THE  CANADIAN    RON    VND  STEET  INDUSTRY 

S  12.  Something  hns  been  said  fri)m  time  to  time  about 
the  possibility  of  producing  iron  in  British  Columbia.  The 
demand  for  manufactured  iron  in  British  Columl.ia  is 
rapidly  increasing,  ami  high  pi '  ••  - ,  d  .  to  the  heavy  freight 
charges  from  Eastern  points  ..n  Gn  it  Britain,  have  fre- 
quently raised  the  question.  1  ho  ore  supplies  on  the  coast 
are  sufiBcient  for  an  iron  indt  ^(ry  mi  a  gfKxi  quality  «>f 
pig  iron  could  be  produced."  ^  .mnll '  il;\.>t  furnace,  en-cted 
in  1880  at  Irondale,  in  the  Stat  of  ..:lingl<>  wjis  ojHjr- 
ated  till  18!)1.  When,  in  1001,  the  iOcific  Stetl  Comjuiny 
was  organized  to  acquire  and  operaU  this  furnace,  it  was 
modernized  by  an  expenditure  of  alK)ut  .100,t  K).  Ores 
from  Texada  Island  and  from  Hamilton,  Washington,  were 
used.  The  Texada  ores  had  to  be  roasted  tr^  .  i  rid  ■  f  sul- 
phur, so  the  project  did  not  meet  with  su  ess  and  \^;is 
closed  down  *  until  1911,  when  operations  were  revi%  ed* 

In  1909  the  Washington  Steel  Company  was  incorporated 
to  acquire  coal  properties  ir\  British  Columbia,  and  t^ 
build  blast  furnaces  and  rolling  mills  north  f  Seattle. 
After  inspecting  the  Vancouver  Is'and  deposit.-  'n  1907, 
Mr  J.  S.  Bradford,  an  English  iron  master,  tri  d  to  or 
ganize  the  Northern  Pacific  Iron  and  Steel  r<  ntipuny,  and 
proposed  the  building  of  open-hearth  steel  furnaces,  blast 
furnaces,  blooming  mills,  tin-plate  mills,  a  st-iron  pipe 
foundry,  irc^  tube  works,  a  bar  mill,  and  later  tup-plate 
and  rail  mills.'  In  1911  the  British  Columbia  Stcii  (  <»m- 
pany  was  formed,  with  a  capital  of  $10,000,000,  to  1  aid 
a  large  steel  plant  near  Vancouver.'  Th»>  <>nly  praoticii  re- 
''alts  of  these  suggestions  have  been  the  a<ldition  of  ;i  i.eel 
foundry  converter  to  the  plant  of  the  Vancouver  Engi  Ber- 
ing Works  in  1909,  the  only  Canidian  steol  furnace  west 
of  the  Great  Lakes.   The  foundry  prorluces  a  sma'    but 


'  Monetary  Times,  vol.  XLiv,  p.  1414. 

•  Monetary  Times,  vol.  XLVii,  p  845. 

'  Iron  Age,  vol.  LXXX,  p.  <i56. 

'  Monetary  Times,  vol.  xlvi,  p.  108<> 


*  1  indcmiin,  op. 

*  lbtd.,p.M5. 


THE  RECENT    JflSTOliV  OF   iUE  INI     aTUV    «S5 


steady  supply  of  avy  steri  castinjrs  which  cannot  be 
coeaply  trai,sf)or*    '  to  wester    Cu'  '       ' 

The  truth  of  th«-  matlfr  -^wins  to  «•  i.uit,  while  there  are 
o«>s  and  coal  and  duxing  .Vi.iis  in  T^ritisl.  Colun  'lia, 
the  present  pri(  ♦;  of  '  )ke  oi  the  coti  (from  )?7  to  $^  '^er 
♦<m.  with  litt'''  I'kelil.ood  df  "*  b^iiig  -sh  hile  the  pn  ,t:at 
j.rive  of  coal  oi.lUiUe*''  does  se*  u  *■    iusti      the  ex- 

pcctatio'  tha  \n  irr>  smelt  induf.trv  v  ill  u  eiop  in 
the  nvuT  ?  iture.  i*Vie<  p  smdii.  -'  on  ^  scai'^  ;  not 
nil  imme*    ite  prospf '  I,    incetli."    ro«~  n  per- 

iected  suffirH'utly    ■    b<     conom.  ally  ie.         iiritisb 

Columbia  nuiustry      ,      ■  n,  mere.\    a  '  ti 

future.* 


f 


§  13.  Mud 
f^me,  of  rect 
ha.>-  '-eei,  aatur 
be  built  I      'he  V\ 
suggestion    \a&  » 
tagesof  SI!  n  a  * 
offer*  d  hi  in  ses  i 


then         ted  if         dsi       products  have 

year      s      ■  f        luted  States.   Hence  it 

f     I    -tev    th         '^unadian  plant  should 

■•d  SU.les     let!  Corp<>ration,  and  this 

discusse       In  1904  certain  advan- 

ne  were  &      )rth.  Canada  at  that  lime 

steel  billets  and  certain 


PH   »r< 

bon  and  s'^eel  products,  l^thei  or  t  '  such  products  were 
c<      iimt* !  in  Canada.   '  ition,     e  duties  on  bar  iron 

a  other  iron  d  st*  <  ^uf-ts,  specially  steel  rails. 
Were  if*  onerons  to  outsiders,  but  ore  and  coking  coal 
ent  -.-.1  <  HPftda  ?  +■  or  a'  a  low  rate  of  duty.  Port  Col- 
?'  on  lor  shore  of  Lake  Erie,  at  a  point  near  the 
\\  ad  Ca.  i.»  wa^  the  location  suggested.  By  10^  the 
Urn  i  S'  tes-  -leel  '  i)oralion  had  acquired  lan»L  near 
Sandwic-     opf.osit  trf"*    and  the  construction  of  a 

$10,00<.  o  plant  w.  ,  Led;  ^  but  in  preference  to 
building  the  company  ^^i  ^xl  a  branch  oflBce  in  Toronto 
in  191     and  since  then  ha.s  been  doing  a  large  business, 

'  Indwttrial  Canada,  vol.  x,  p.  775. 

'  '■'--    :<h  Columbia,  Report  of  Minitltr  of  Mine*,  1914,  p.  27. 

*         letary  Time*,  vol.  xxvii,  p.  stf.  *  Ibid.,  vol.  xxxix,  p.  di3. 


>]  ' 


836    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 


liii^ 


esp>ecially  in  lines  on  which  the  duties  are  low.'  Such  arti- 
cles as  triangular  mesh  concrete  reinforcement,  structural 
steel,  shapes,  bars,  rods,  sheet  steel,  steel  pipe,  wire  rope, 
and  nails  have  found  a  favorable  market.' 

At  the  annual  meeting  of  the  directors  of  the  United 
States  Steel  Corporation  at  New  York  on  December  31, 
1912,  the  company  decided  to  build  a  $20,000,000  plant 
at  Sandwich,  to  manufacture  practically  all  chisses  of  sted, 
wire,  rails,  structural  and  bar  steel,  tin  plate,  tubing,  nails, 
pig  iron,  and  steel  billets.  Building  operations  have  since 
then  been  postponed,  pending  tariff  legislation  in  either 
Canada  or  the  United  States,  or  both. 


$  14.  It  seems  practically  impossible  satisfactorily  to 
cover  the  miscellaneous  undertakings  in  the  manufacture 
of  iron  and  steel  products  in  Canada.  Yet  a  large  number 
of  firms  carry  on  a  more  or  less  successful  business  in 
special  branches.  Between  1891  and  1910  the  number  of 
plants  producing  "iron  and  steel  products"  increased  from 
twenty-nine  in  1890  and  1900  to  eighty-nine  in  1910.  The 
products  increased  in  value  from  about  $4,000,000  in  1890, 
to  about  $7,000,000  in  1900,  and  to  over  $34,000,000  in 
1910.  Although  the  number  of  foundries  and  machine 
shops  did  not  exT>and,  tlieir  products  increased  in  value 
from  $17,000,000  in  1890,  and  $15,000,000  in  1900,  to  over 
^5.000,000  in  1911.  Bridge-building  and  the  production 
of  wire  fencing  have  also  prospered.*  In  the  calend&r  year 
1910  the  total  production  of  iron  and  steel  products 
amounted  to  $113,000,000  as  compared  with  $80,000,000 
in  1890  and  1900.* 

Some  attempts  have  come  to  unhappy  endings  and  other 
efforts  have  been  reorganized  and  redirected.  Some  of 
these  are  sufficiently  important  to  warrant  discussion.  In 
1901  the  Cramp  Ontario  Steel  Company  was  formed  to 


'  Monetary  Timet,  vol.  xlvii.  p.  8K). 
*  Sec  AppeuduL  C.  TubW  I. 


'  Ibid.,  vol.  XXX,  p.  139. 
*  Ilnd.,  Tiibie  11. 


THE  RECENT  fflSTORY  OF  THE  INDUSTRY    237 


build  at  CoUingwood  a  blast  furnace,  steel  furnaces,  and 
rolling  mills,  to  produce  pig  iron,  steel  ingots,  plates,  struc- 
tural steel,  rails,  and  rods.  Colling\\'ood  was  chosen  as  the 
site  of  the  proposed  plant  because  it  had  shipping  advan- 
tages by  which  ore  and  coal  could  be  cheaply  assembled, 
and  the  product  cheaply  marketed,  especially  in  the  North- 
west, and  because  it  offered  a  bonus  of  $115,000  and  ex- 
emption of  part  of  the  property  from  taxation.'  Ore  was 
to  be  p-'cured  from  the  Helen  Mine.*  Machine  shops,  a 
forge,  p.  ./er  works,  a  merchant-bar  mill,  rolling  mills 
and  heating  furnaces,  a  guide  mill,  and  an  open-hearth 
plant  were  built  in  1902.'  The  blast  furnace  was  omitted 
from  the  list  temporarily,  so  that  large  stocks  of  pig  iron 
would  not  be  accumulated.*  \lods,  a  special  product  of  the 
company,  were  to  be  sold  to  ihe  Imperial  Steel  and  Wire 
Company,  whose  plant  was  adjacent  to  hat  of  the  steel 
company. 

Neither  the  rolling  mills  nor  the  open-hearth  fumaci; 
ever  saw  hot  steel,  because  the  company  got  into  financial 
difficulties  in  1903.'  In  1904  it  was  relieved  of  its  obliga- 
tion to  build  the  blast  furnace  until  the  steel  plant  should 
be  fully  established,  on  condition  that  the  town  could  re- 
duce its  bonus  from  $115,000  to  $60,000.«  In  the  same  year 
the  company,  which  had  been  sued  for  a  note  of  $52,600,' 
was  reorganized  as  the  Northern  Iron  and  Steel  Company.' 
The  new  company  was  to  install  a  plant  to  make  rolled 
wire  rods,  l)olts,  nuts,  angles,*  and  such  other  shapes  and 
materials  as  the  market  demanded.'"    Operations  were 

*  Iron  Age,  vol,  ucvii,  January  10,  p.  21. 
'  Morang's  RegiHer,  IDOl.  p.  91. 

*  Iron  Age,  vol.  lxx,  October  30,  p.  9. 

*  Ibid.,  vol.  Lxxii,  September  10,  p.  20. 

*  Ontario,  Rejxrrt  of  Bureau  of  Minea,  1908,  p.  198. 

*  Monetary  Times,  vol.  Tixxvji,  p.  1127. 

'  Commetcial  and  Finan'^al  Chronicle,  vol.  LXXVII.  p.  2348. 
'  Ibid.,  vol.  Lxxix.  p.  215. 

*  Monetary  Times,  vol.  xxxvni,  p.  833. 
'"  InduMrial  Canada,  vol.  v,  p.  442. 


1 


-« 


Illl^ 


II 

it!| 


«38    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

begun  in  1906,'  but  m  1908  the  Northern  Iron  and  Steel 
Company  also  found  itself  in  financial  diflSculty.' 

Meanwhile,  the  Imperial  Steel  and  Wire  Company  of 
Collingwood,  whose  directors  were  the  same  as  the  direc- 
tors of  the  Cramp  Steel  Company,'  had  been  formed  in 
1904  to  manufacture  wire  rods,  wire  and  wire  nails,  wood 
screws  and  wire  fencing,  at  a  time  when  there  was  a  large 
importation  of  such  articles.*  In  1906  the  plant  was  en- 
larged from  a  capacity  of  from  fifteen  to  fifty  tons  per  day.* 
Since  then  the  business  has  been  flourishing,  and  the  com- 
pany declared  a  twenty  per  cent  stock  dividend  in  1912.* 
So  far  as  can  be  understood,  the  Northern  Iron  and  Steel 
Company's  business  has  been  carried  on  in  conjunction  with 
that  of  the  Imperial  Steel  and  Wire  Company. 

In  1905  the  Canatla  Tin  Plate  and  Sheet  Steel  Company 
was  granted  the  right  to  develop  1100  horse-power  from 
the  Williamsburg  Canal.  It  was  also  asking  the  town  of 
Brockville  for  land  worth  $2250,  free  water,  tax  exemption, 
and  the  right  to  run  a  railway  track  to  the  St.  Lawrence 
River  The  company  agreed  to  erect  mills,  to  employ  400 
men,  and  to  buy  the  surplus  electric  power  of  the  town.^ 
Building  was  started  in  May,  1905.  It  is  said  that  the  com- 
pany had  expected  tariff  protection,  but  as  we  have  seen, 
the  users  of  tin  plate  and  sheet  steel  successfully  objected 
to  the  increase  of  the  duties  on  such  raw  materials.'  Welsh 
and  American  competition  was  severely  felt,  bu'.  an  appeal 
made  for  the  application  of  the  Dumping  Act'  was  only 
temporarily  granted.'"  In  1909  the  company  got  into  finan- 
cial difficulties,  and  was  reorganized  as  the  Canadian  Sheet 


'  Monetary  Timet,  vol.  XL,  p.  4C0. 

*  Commereial  and  Financial  Cbnmicle,  vol.  Lxxxn,  p.  484. 

*  Ibid.,  vol.  LXXix,  p.  l(H5. 

*  Monetary  Timet,  vol.  xxxvii,  p.  375.    '  Ibid.,  vol.  xxxix,  p.  186. 

*  Ibid.,  vol.  xux,  p.  108.  '  Ibid.,  vol.  xxxviu.  p.  1245. 
'  Haxdirnrr  and  Metal,  vol.  xvii,  February  5,  1910,  p.  44. 

*  Iron  Age,  vol.  lxxxv,  p.  iWO. 


isna.,  V 


rol. 


iU. 


mm 


THE  RECENT  mSTORY  OF  THE  INDUSTRY    239 

Steel  Corporation  to  manufacture '  black  and  galvanized 
sheets,  for  which  there  was  a  good  market  —  one  better 
than  for  tin  plate." 

Of  like  character  has  been  the  rolling-mills  project  for 
Belleville,  Ontario.  In  1898  the  Abbot-Mitchell  Iron  Com- 
pany was  formed  to  make  pig  iron,  bar  iron,  puddled  bar, 
and  Bessemer  steel  at  Belleville.'  The  company  decided 
to  carry  on  the  work  of  rolling  mills  at  first,*  and  built  a 
plant,  including  a  spike  and  nail  factory  in  1899,  but  for 
some  reason  or  other  the  company  failed,  and  in  1901  the 
plant  was  sold  at  auction."  In  1902  the  Belleville  Rolling 
Mills  ('ompany  was  formed  to  operate  the  works,*  but 
they  were  soon  closed  dovra  again  and  part  of  the  product 
and  the  fuel  were  sold  for  taxes.^  In  1906  the  nail-making 
machines  were  removed  and  machinery  to  manufacture 
horseshoes  was  installed.*  The  plant  now  belongs  to  the 
Steel  Company  of  Canada. 

Elsewhere  mon-  success  attended  various  ventures. 
Most  rolling  mills  in  existence  in  1897  have  since  made  ex- 
tensions to  their  plants."  Sydney  has  become  the  center  of 
a  considerable  iron  and  steel  industry,  attracted  largely  by 
the  presence  of  the  plant  of  the  Dominion  Steel  Corpora- 
tion.'"  Many  new  establishments  have  been  planned  and 

'  Monetary  Time*,  vol.  xui,  p.  «028.     •  Iron  Age,  vol.  lxxxv,  p.  «89. 

»  Monetary  Timet,  vol.  xxxii,  p.  1090. 

•  Iron  Age,  vol.  Lxni,  February  iS,  p.  15. 

»  Monetary  Timet,  vol.  xxxiv,  p.  1300.        '  Ih'd.,  p.  1596. 

»  Ibid.,  vol.  xxxviii.  p.  50«.  »  Ibid.,  vol.  XL,  p.  1«7. 

»  In  1899  the  Maritime  Nail  Company  extended  its  works  at  St.  John, 
doubling  the  output,  and  in  1913  it  built  a  nail  factory  at  Fort  William. 
In  1904  the  plant  was  bume<l  down,  and  Sydney,  Nova  Sootia,  bid  for 
till-  b)isin»-8s.  Mnchi-  wan  reinstalled  in  1900  and  in  1907  tJie  Cape- 
wtll  Honw-Nnil  Coi  '  Hartford,  Connecticut,  look  over  a  contn>l- 

linj?  interest.   In  19<  '  Tender  and  Company,  of  'H.  John,  extended 

thoir  plant,  and  the  >  .tolling  Mills  Company,  of  Montreal,  followed 
the  same  policy. 

'"  In  1903  the  Dominion  Tar  and  Chemical  Company  establiiihed  a 
plant  at  Sydney  to  distill  various  chemical  products  from  the  Pominion 
Iron  and  Steel  Company's  coke  ovens.  The  Sydney  Cement  Company 
»U3  fonmtl  li>  uac  llic  slag  from  the  furnaces  for  the  luacufattufe  of  a 


m 


Ills 


240    THE  C   .N.U>IAN  IRON  AND  STEEL  INDUSTRY 

P.g  iron  has  U.n  produced  by  William  Frankel,  of  Tor- 
onto.. The  furnace  of  the  Pictou  Charcoal  Iron  Company 
was  lea«Hl  to  the  Mineral  Products  Company  of  HilkboT 
New  Brunswick,  in  1897.^  bi,^,  has  nut  been  work^sin^' 
809.3  William  Kennedy  and  Sons,  of  Owenl^'^d.  Sn 
ano.  have  produced  steel  billets  and  steel  castings.^  In 
l.)13  a  blast  furnace,  capable  of  producing  300  to  350  tons 

o  ma  leable  and  Bessemer  pig  iron  daily,  was  built  by  the 

Buffalo  Umon  Furnace  Con.pany  at  Port  Colbome.  On! 

tano.    Th.s  .s  apparently  destined  to  InK^me  one  o    the 

more  miport^nt  iron  plants  of  Canada.* 

produce  Ln  Jd^Mc^^^^lZZlZJ'-'^^^^^^  '" 

iarge  stove  and  founds  co^an;  5  a'  i  r^^^SriT  o4"  T  " 
have  nogotmted  with  the  town  Jn,  time  to  time       ^  "  ^"^ 

Lanadtan  Trade  Index,  1910. 
'  Canadian  Mining  Manual.  1896.  p.  146 

Iron  Age.  vol.  lxx.  February  26.  p.  21. 

Canadian  Mining  Journal,  vol.  xxxi.  p  208 

Iron  Age,  vol.  xci,  p.  I2t'5 

ca.sti„«s  under^^a  7af  n^  T^  to  manufacture  steel 

fom..-.!  to  mnnufactur;  «',^w,   L.l  f!  ,        T.  ^""'^  f^o'npany  waa 
American  FIor«^h,,e  0,„TnTnv  h  '  ,  i  """^  ^^^'  "'  Montn-ai;  the 

Works;  the  Toronto  lV3st,tirrZ        ""  '^  V*"""'°"  ''^°>*'-i"'' 
faHurt.  railway  and  S  e^o«'  «3""''  T^n''^-  "  '^'''"*  '°  '"""«- 

Company  ..Jn  to  maltr.^stXr^V^h'if;"  '^  «"" 

pl.es  at  Toronto;  a  branch  factory  of  the  Uni^n  D«w„  S^"  1  r      "''  ""^J 
Pennsylvania  was  establish.-d  at  Hamili,.„  .  7      ^'  ^""ipany  «'f 

.having  finishing.,  for^ t  ^n^'r  |  ;^';rC  :^^^^^^^  «^-' 

bmlt  a  plant  at  In^ersoll;  the  Canadian  Shovel  and  T,k    O  '^"^ 

inc-orporated  to  make  spud.-s  and  me.h„n;,r»     i     .  .V-'lompany  waa 


:.M  ' 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    241 

§  15.  This  detailed  discussion  of  the  development  of 
the  various  establishments,  together  with  the  statistics  of 
growth  previously  presented,  make  very  evident  the  rapid 
advance  of  the  Canadian  iron  and  steel  industry  in  recent 
years.  A  few  features  of  this  progress  are,  however,  of 
particular  interest. 

In  the  first  place,  the  greatest  developments  have  oc- 
curred in  the  primary  industry  in  the  Provinces  of  Onta- 
rio and  Nova  Scotia.'  The  output  in  Quebec  has  dropped 
from  11,121  tons  in  1904  to  658  tons  in  1911,  and  to  noth- 
ing in  1912;  in  no  year  has  the  industry  of  Quebec  assumed 
any  great  importance.  The  Nova  Scotia  industry  was  in 
existence  prior  to  1897,  but  rapid  advances  were  made  in 
1901  and  in  1904  to  1905.  In  the  calendar  year  1912  Nova 
Scotia  produced  as  much  as  424,994  tons  of  pig  iron.  On- 
tario has  realized  the  most  phenomenal  growth  of  her  iron 

ing  Mills  Company  was  formed  to  huM  a  foundry  and  a  wire  and  nail 
factory  at  Fort  William.   In  the  same  year  all  the  "radiator  rompanies  of 
Canada  were  amalgamated  as  the  Steel  and  Hadiation  Company  of 
Canada,  and  in  191«  this  company  built  a  now  boiler  and  radiator  plant 
at  St.  Catherines.   In  1010  there  were  mergers  of  sMveral  malleable  cast- 
ings companies  and  of  .several  machinery  companies.   The  International 
T(K)1  Steel  Company  was  formojl  to  manufacture  high-gra<le  steel  f<ir  the 
niakinj?  of  edge  t<H>ls.    In  191 1  the  Canadian  TuIk-  and  Iron  Company 
built  a  plant  at  C6ls  St.  Paul,  Quebec,  for  the  manufacture  of  nnh,  tubes, 
liolls,  and  girders.  The  Canada  Steel  Compai.y  built  a  mill  at  Hamilton 
to  roll  steel  bars  and  to  manufacture  parts  of  farm  imolements  from  old 
scrap  rails.  In  1910  the  Eastern  Canada  Steel  and  Iron  Works  of  Queb^ 
entted  a  large  plant  to  manufacture  structural  steel  for  buildings,  rail- 
ways, etc.,  at  Quebec,  and  it  doubled  the  plant  in  1911.  In  1918  and'  1913 
three  English  firms  established  branches  in  Canada  to  manufacture 
|H)ilers.  window  sashes,  and  t<H)ls.  respectively.   In  1913  the  Owen  Sound 
Holling  Mills  were  incorporated  to  manufacture  wrought  iron  and  steel 
piping  and  tubing,  pipe  Bttings,  bar  iron,  steel  rods,  structural  steel  fish 
plates,  spikes,  an<l  stivl  rails.   A  German  firm  established  a  company  to 
handle  its  products  and  possibly  to  build  a  mill  if  sales  should  justify 
such  a  scheme.  The  Imperial  Iron  and  Steel  Corporation  built  a  rolling 
null  and  a  horseshoe  factory  at  Prince  AU)ert,  Saskatchewan.  The  Swed- 
ish Crucible  Steel  Company  and  the  Detroit  Steel  Products  Company 
built  factories  at  Windsor.  OnUrio,  and  the  American  Titanic  Iron  Com- 
p.iii>w)f  Quebec  was  formed  to  produce  iron  and  steel. 
■  See  Ap|)eudix  B,  Table  II. 


ffl- 


■•T 


«42    THE  CAN.VDIAN  IRON  .\ND  STEEL  INDUSTRY 

and  steeliadustry.  In  1895  no  pig  iron  was  produced  in 
the  I  rovmce.  It  was  the  Hamilton  Furnace  that  made 
Untario  an  iron-producing  Province  in  1896.  At  the  present 
tmie  Ontario,  whose  output  was  526.635  tons  in  1912  pro- 
duces  more  pig  iron  than  all  the  other  Canadian  Provinces 
together. 

Another  striking  feature  I.  that  the  industry  is  rather 
definitely  locahzed.   In  Nova  Scotia,  Sydney.  North  Syd- 
ney, and  Sydney  Mines  are  the  chief  centers  of     ',e  in- 
dustry,  due  largely  to  the  existence  of  coal  supplier.  Mon- 
treal and  Its  vicinity  contain  practically  all  the  important 
establishments  in  Quebec.  Although  Ontario's  industry  is 
more  widely  distributed,  the  chief  centers  are  Sault  Ste. 
Mane.    Midland,   and   Hamilton.    Deseronto   and   Port 
Arthur  are  less  favored  points,  and  the  establishments  in 
these  places  are  correspondingly  smaU.  Port  Colbome  has 
recently  become  a  new  iron  center. 

The  growing  importance  of  the  steel  branch  of  the  in- 
dus  ry  ,s  simply  an  expression  of  a  general  world-wide 
tendency.  The  manufacture  of  steel  was  begun  in  Canada 
a.  early  as  1883  by  the  Nova  Scotia  Steel  Company  and 
the  Montrea   Steel  Works,  but  there  we^  pr  Jioiy  „o 
a^lditu^ns  to  the  steel  furnace  capa.-ity  until,  in  1900;  the 
nam.lt<,n  (  ompany  added  a  steel  branch  to  their  plant 
The  Dommion  Iron  and  Steel  Company  and  the  Algoma 
Stee    Company  which  have  gro^T.  up  since  1900.  turn 
practically  al   their  large  output  of  pig  iron  into  .steel  b^ 
lets.    Wrought  iron  and  puddled  bars  have  practically 
passed  from  the  iron  and  stc-l  vocabulary.    ImC  thi 
m>n  produce    by  .he  larger  ompanies  is 'usually  turned 
into  steel  T^■lthout  even  In-ing  mouldcl  into  pigs 

Although  the  manufacture  of  finished  prmlucts  is  al- 
ways the  most  important  phase  of  an  industrv.  it  is  just 
tins  feature  of  development  that  is  so  fret.uenti;  forgotten 
while  the  pnmap-  h.dusto-  rocoives  the  bulk  „^  public  aU 
tcntiou.  As  we  have  seen,  an  i.ureashig  uuml>er  ..f  ...,....« 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    243 


producing  highly  finished  articles  have  been  put  in  opera- 
tion, or  tlie  size  of  tlie  old  plants  hivs  been  expanded  in  re- 
cent years.  The  most  striking  feature  of  this  development 
is  tliat  a  large  part  of  it  liiis  occurred  in  the  last  decade. 
The  value  of  the  capital  investcl  increased  over  200  per 
cent  l)etween  1900  and  1910  as  compared  with  but  54.7 
per  cent  increase  in  the  previous  census  period,  and  the 
value  of  the  product  advanced  by  over  225  per  cent  as 
compared  with  22.2  per  cent  growth  for  the  earlier  decade.' 

Part  of  this  rapid  advance  in  the  finishing  industry  is 
due  to  the  operations  of  the  large  iron  and  steel  companies 
themselves.  It  seems  to  be  a  general  principie  that  the  com- 
pany that  can  produce  highly  finished  products  is  certain 
of  a  fairly  stable  market.  Hence,  when  the  iron  and  steel 
industry  is  under  discussion,  one  must  reraemlier  that  a 
modem  steel  corporation  is  no  small  concern ;  in  fact,  it  is 
apt  to  produce  everything  from  iron  ore  and  pig  iron  to 
tucks.  In  this  resjiect,  then,  as  well  as  in  the  increased  out- 
put of  primary  products,  the  Canadian  iron  and  steel  in- 
dustry has  made  phenomenal  progress  in  recent  years. 

Finally,  most  of  the  Canadian  companies  have  declared 
themselves  eflBcient  and  prosperous.  While  it  is  a  common 
and  politic  method  to  complain  of  depressions  and  diflB- 
culties,  and  to  state  publicly  the  dangers  of  the  industry 
whenever  protection  is  being  discussed,  it  is  still  more  com- 
mon for  the  chief  iron  and  steel  financiers  to  laud  the  op- 
portunities that  lie  in  the  future.  The  annual  reports  of  the 
Steel  Company  of  Canada,  the  Canada  Iron  Corporation, 
and  especially  the  Dominion  Steel  Corporation,  the  Nova 
Scotia  Steel  and  Coal  Company,  and  the  Lake  Superior 
Corporation,  glow  with  such  terms  as  "moving  smoothly," 
"every  confidence,"  "cannot  fail  to  secure  prosperity," 
"<lwreased  cost  of  manufacture."  Obviously  the  recent 
ventures  have  been  successful  and  the  future  is  asaured. 
'  See  Appendix  C.  Table  II. 


^5    -  <™*^*'"'"j 


i         I 


ill' 


|: 


CHAPTER  X 

THE   COMBINATION   MOVEMENT 

§  1.  It  would  have  been  surprising,  in  these  days  of 
trusts   mdustnal  combinations,  and  integration  of  indus- 
try. ,f  the  organization  of  a  Canadian  iron  and  steel  trust 
to  att.u.k  the  L  luted  States  Steel  Corporation,  or  the  amal- 
gamation  of  the  Canadian  companies  with  the  United 
btates  Stee  Corporation  to  form  an  "all-Araerican"  trust 
had  never  l^een  mentioned.  As  early  as  1899  a  suggestion 
was  made  that  Canadian  interests  in  the  iron  trade  should 
unite  in  an  organization  which  could  purchase  supplies 
through  a  centnU  agency  and  seU  products  in  the  same 
hiterelt  '  '^^^t'-oying  competition  or  opposmg  public 

Although  no  such  comprehensive  scheme  has  as  yet  been 
devised  or  realized   there  has  been  evidence  from  time  to 
time  that  the  producers  of  certain  kinds  of  articles  have 
formed  asswiations  which  have  been  quite  effective  in  their 
control  over  the  prices  of  their  particular  products.    It 
would  require  the  "big  stick"  of  a  Roosevelt  or  the  imag- 
ination of  a  Pujo  Committee  to  ferret  out  the  truth  in 
respect  to  mtricacies  of  relationship  between  the  Canadian 
iron  and  stee.  companies.  Their  actual  amalg-imation  has 
attra^tec    attention,  and  it  is  the  purpose  of  the  present 
chap.er  to  estimate  so  far  as  may  be  possible  the  extent 
and  character  of  this  movement. 

§  2.  Between  the  years  !890  and  1900  there  was  a  phe- 
nomenal  growth  m  the  wu-e-nail  business  and  other  hard- 
ware Imes  m  Canada  ^  as  well  as  in  the  United  States.   But. 

'  Monetary  Times,  vol.  xxxii.  p.  1384. 
»  Canadian  Engineer,  vol.  ix,  p.  54. 


THE  COMBDIATION  MOVEMENT 


245 


in  a  country  like  Canada,  with  a  comparatively  small  home 
ctmsumption,  manufacturers  soon  reach  the  point  of  over- 
production, and  the  consoqueut  struggle,  besides  compe- 
tition from  without,  demand  a  certiiin  unity  to  prevent 
price-cutting  and  the  granting  of  excessive  credits  and 
discounts.' 

As  we  have  seen,  the  tariff  on  most  hardware  articles  was 
increased  in  1887,  and  competition  soon  develoi)ed.  To 
meet  this,  associations  were  formed  from  time  to  time  and 
maintained  so  far  as  possible.  It  is  not  evident  just  when 
the  associations  were  first  organized,  but  they  appear  to 
have  secured  satisfactory  control  by  1893.'  Possibly  the 
as.sociations  were  formed  in  1802;  possibly  they  existed 
before  and  were  reorganized  in  that  year.  At  all  events, 
manufacturers  of  iron  products  were  in  Toronto  in  Janu- 
ary, 1893,  forming  associations  of  makers  of  bar  iron,  cut 
nails,  horseshoes,  bolts  and  nuts,  rivets  and  burrs,  screws, 
plain  wire,  barbed  wire,  and  wire  nails.'  A  shovel  associa- 
tion is  supijosed  to  have  existed  from  about  the  same  time.* 
The  producers  of  these  different  articles  were  usually  the 
same  persons,  and  the  features  and  methods  of  the  various 
associations  were  practically  imiform.  The  main  features 
may  be  briefly  set  forth. 

In  the  first  place,  all  producers  of  certain  goods  were 
invited  to  join  an  a.ssociation.  Frequently  individual  mem- 
bers found  it  advantageous  to  resign  from  the  association 
and  forfeit  their  deposits  in  order  to  gain  the  advantage 
of  increased  profits  on  a  more  extensive  output  and  sale. 
Later  they  woidd  be  invited  to  reenter  the  told.  In  short, 
the  associations  were  made  as  comprehensive  as  possible, 
and  included  the  Montreal  Rolling  Mills,  the  Ontario 
Rolling  Mills  of  Hamilton,  the  Ontario  Tack  Company, 


Li- 

i'': 


'  Iron  Age,  vol.  iJtvi,  November  29,  p.  55. 

•  Hardware  and  Metal,  December  W.  1906,  p.  «1. 
'  Monetary  Timet,  vol.  xxvi,  p.  788. 

*  iron  Age,  vul.  ux,  Fcbniarj'  il,  p.  i5. 


...liJJlULl   '^-Jfl 


l'< 


240    THE  C.YNADIAN  IRON  AND  STEEL  INDUSTRY 

Pillow-Hersey  Com]>any  of  Montreal  (which  was  absorbed 
by  the  Montreal  liolliii^'  Milis  in  1903,  but  still  retained 
its  identity  so  far  as  the  association  agreements  were  con- 
cerned), the  Graham  Nail  Works,  the  Maritime  Nail  Com- 
pany of  St.  John,  W.  H.  VVoodall,  Portland  Rolling  Mills 
of  St.  Johii,  the  Peck  Benny  Rolling  Mills  of  Montreal, 
J.  Pender  and  Company  of  St.  John,  and  the  Abbott- 
Mitchell  Company  of  Belleville,  Ontario.  Not  all  of  these 
belonged  to  the  associations  all  the  time  or  to  all  the  a.sso- 
ciations  at  any  time,  but  whenever  they  began  to  act 
independently,  they  were  invited  to  conform  to  the  rules 
by  the  secretary,  "Jenkins  and  Hardy,"  '  of  Toi-onto;  and 
if  they  refused,  other  steps  were  taken  against  them. 

The  pomt  of  departure  in  the  method  of  the  associations 
was  the  adoption  of  a  base  price  for  the  different  articles, 
from  which  price  variations  could  Im;  made,  subject  to  the 
rules  of  the  Jissociations.  For  instance,  during  several 
years,  the  quoted  price  of  cut  nails  was  $2.10,  but  in  1893 
this  was  raised  to  $2.50  under  the  protection  of  higher 
prices  in  the  United  States.*  In  general,  the  prices  varied 
from  time  to  time  according  to  the  conditions  of  competi- 
tion with  independent  Canadian  firms,  or  with  American 
producers,  or  by  reason  of  price-cutting  by  the  members 
of  the  a.ssociations  themselves.  The  accompanying  table 
indicates  the  maximum  variations  and  the  maximum  and 
minimum  price  indices  from  1890  to  1902. 

The  prices  of  nearly  all  articles  were  low  from  1893  to 

1897,  but  several  ca.ses  of  severe  cuts  occurred  in  1897  and 

1898.  Other  breaks  in  the  price  level  occurred  from  1902  to 
1903  and  1906  to  1909.  Since  1909  the  prices  of  horse- 
shoes, screws,  and  cut  nails  have  risen  considerably  under 
the  control  of  the  Ste^l  Company  of  Canada. 

Yet  thcsi-  prill-  lists,  as  quoted  in  trade  journals,  can 
scarcely  be  regard.  <1  as  significant.  Actual  prices  can  only 
be  estimated  by  deducting  from  the  hiise  prices  the  dis- 


'  A  (inn  o'  accountants. 


.  ron  Agt,  vol.  LVI,  p.  045. 


■M 


THE  COMBINATION  MOVEMENT 


i47 


The  index  numbers  Jm  the  wholemle  prices '  of  certain  arti- 
clen  nupposedly  r<mtrol!ed  by  various  associations:  the 
years  for  the  maximum  and  minimum  prices,  1(0)0  to  1912; 
special  years  oj  decrease  in  price 


Afticlr 


Bar  iron 

Horecshoea      

ScTfWs  (wood)  

('ut  nails 

Wire  nails 

Giiivanizvd  barbr<l  wirefenc- 
iiiK    


Minimum 


InJn 
numbrr 


70.0 
01.« 
!)0.0 

73.4 

06.1 


Ycv 

189H 
18i>H 
1908 
1897 
18U8 

1012 


Mui'num 


Iniln 
numbrt 


l«9.d 
116.6 
IJ«7.9 
119.3 

140.9 


Yw 


180C 
19U 
1912 
1906 
190U 

1890 


Special  years  of  decrease 

Bar  iron 1894-98.  1901.  1904 

llors<>shoes 1897-99,  1901-02.  1909 

Scn-ws  (wood) 1007 

Cut  uftiU 1891-92.  1897-98 

Win-  nails 1»03.  190(i.  1908 

Gaivaiiiwd  barbed  wire  fencing 189j.  1897  '>H,  1909 

counts  given  to  the  jobbers  or  wholesalers.  Members  of 
the  associations  received  a  list  of  jobbers  who  were  en- 
titled to  special  or  "  loyalty"  discounts,  provided  they  pur- 
chased from  the  association  firms  alone.  Each  jobber  paid 
the  base  price;  but  after  making  a  statement  of  the  a^iount 
purchased,  and  a  declaration  that  no  goo<b  hid  been  pur- 
chased elsewhere,  the  discounts  were  retume*  l>y  the  secre- 
tiiry  of  the  associations  and  thus  the  actual  price  to  jobbers 
was  less  than  the  so-called  base  price.  It  was  also  found 
necessary  from  time  to  time  to  give  special  di-scounLs  to 
such  large  buyers  as  Massey-IIarris  and  Company,  whose 
importance,  of  course,  enabled  them  to  enforce  their  claim 
to  special  consideration. 
These  prices  were  further  encroached  upon  from  time 

>  Canada.  Wholetale  Pricct  in  Canada,  1890-12;  base  period  1890  to 
ISSU,  luciusivt:. 


ti  .:;F 


848    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 


I!: 


to  time  by  pri'"e-cutting  of  firms  which  had  previously  be- 
lonfTcd  to  the  assm-iutiona.  A  :  ti*.  k  and  na*:  .  iiines  can 
be  quickly  iiislulled,  .a  opportunity  to  'cap  un  extraor- 
dinary, if  injM)rary,  profit,  was  frequently  too  great  a 
temptation  to  Iw  withstood.  Such  an  occurrence  was  at 
fir  4  guarded  against  by  attempts  to  limit  production  by 
rrstricting  the  numl)er  of  machines  in  operation  and  pn»- 
hihiting  an  increase  in  their  nunil)cr.  Dejiosits  of  from  $50 
to  $200  were  required,  varying  with  the  produwr  and  the 
year.  These  deposits  were  forfeited  whenever,  upon  com- 
plaint of  one  member  of  an  association,  it  could  be  proved 
that  another  meml)er  had  broken  the  agreement. 

Much  of  the  difficulty  of  maintaining  prices  was  due  to 
comi)etition  from  without.  When  the  nail  associations  of 
the  United  States  broke  up  in  1896,  the  Canadian  price  of 
cut  and  wire  nails  promptly  fell,  and  the  associations  were 
J) radii  idly  dissolved.  As  the  Maritime  Provinces  nail  firms 
seemed  to  have  sjjecial  difficulty  .  meeting  the  competi- 
tion of  both  British  and  Americ.m  firms,  they  were  fre- 
quently tempted  to  cut  prices.  Whene\  «t  such  practices 
were  deemed  necessary  to  keep  the  trade  from  outsiders, 
the  secretary  of  the  associations,  who  was  supf>osed  to  pass 
judgment  on  the  question  of  necessity,  gave  his  sanction. 
For  instance,  from  time  to  time  the  Ontario  Rolling  Mills 
were  given  permission  to  meet  the  competition  of  the 
McDonnell  Rolling  Mills  and  the  Atlas  Tack  Company,  as 
well  as  American  mills.  Such  a  practice  was  avoided  when- 
ever pos.sible. 

As  the  system  of  forfeiting  deposits  was  not  always  satis- 
factory, a  pool  system  was  introduced  in  1898.  Each  mem- 
ber was  required  to  pay  15  to  25  per  cent  of  the  value  of 
excess  sales  to  the  associations.  If  a  man  hod  not  secured 
his  share  of  the  trade,  he  would  receive  \5  to  25  per  cent 
on  what  he  had  been  unable  to  sell.  The  aim  of  this  sys- 
tem was  the  limitation  of  output  and  salos  to  a  "desirable" 
quantity.  The  pool  was  divided  according  to  an  adjusted 


THE  COMBINATION  MOVEMENT 


U9 


proportion  determined  by  the  amount  manufactured  by 
each  firm. 

Altliough  it  is  difficult  to  determine  exat-tly  what  con- 
trol was  exercised  by  the  associations,  it  appears  that 
practically  all  the  important  firms  were  members  of  the 
asscK-iations  from  time  to  time,  and  that  various  measures, 
fines,  special  forms  of  competition,  t^'--\  pooling  agree- 
ments were  used  to  keep  such  members  in  line.  The  jobU'rs 
were  controlled  by  a  system  of  si)ecial  and  loyalty  dis- 
counts which  they  could  scarcely  afford  t(j  sacrifice.  Sub- 
ject to  English,  American,  and  domestic  competition,  and 
the  possibility  of  infraction  of  the  agreements,  prices  were 
maintained  as  high  as  po-  ible.  The  reduction  of  tlie  tariff 
on  such  articles  as  nails,  bar  iron,  galvanized  barbed  wire, 
and  horseshoes,  in  18!)(»  and  1897,  evidently  reduced  prices 
and  temporarily  di>')rganized  the  associations.  In  1;K)5 
these  hardware  associations  were  prosecuted  in  the  Toronto 
Police  Court.  The  magistrate  held  th  •  prices  ho'!  l-ten 
kept  up.  and  comL  tted  the  members  of  the  a-  <^ciati'>ns 
for  trial.  '»ut  no  repoi  of  the  trial  in  ■  higher  c\  .  n  be 
fouiid,  and  there  is  little  evidence  of  the  txister  <;  j  .■ 
ciations  since  that  time. 


m 


ed 


§  3.  As  ji  matter  of  fact,  there  has  l^een  little  need  for  this 
old  form  of  combination  in  the  hardware  lines  since  1909, 
in  view  of  the  formation  of  the  Steel  Comp>any  of  Canada, 
which  now  controls  the  larger  part  of  the  output  of  hard 
ware  articles  in  Canada.  This  Steel  Company  of  Car  .i 
was  a  combination  of  the  Hamilton  Iron  and  Steel  Com- 
pany and  practically  all  ihe  important  hardware  produc- 
ing firms  in  Canada.' 

The  Hamilton  Iron  aid  Steel  Company  was  itself  a  con- 
solidation of  a  number  of  firms.  In  1899  the  Hamilton 
Blast  Furnace  Company  and  th  Ontario  Rolling  Mills 
Company,  a  previous  consolidation  of  two  rolling  mills  in 

>  Ir^^^rial  Canada,      \.  y.  p.  331. 


r> 


.| 


flfe 


J  , 


m 
Iji 


850    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

Hamilton,  were  amalgamated  as  the  Hamilton  Steel  and 
Iron  Company  with  a  capilalization  of  $2,000,000.  This 
arrangement  miited  a  smelting  works,  rolling  mills,  and 
forge  works;  all  successful  institutions.  Some  of  the  rolling 
mills  had  previously  used  wrought  scrap  and  puddled  bars 
as  raw  materials,  and  it  was  thought  that  the  amalgama- 
tion would  probably  result  in  the  complete  disuse  of  scrap 
iron. '  In  the  same  year  the  8  per  cent  dividend  on  $150,000 
of  preferred  stock  of  the  Equitable  Mining  and  Develop- 
ing Company,  which  was  formed  to  mine  ores  in  eastern 
Ontario  under  contract  with  the  Hamilton  Company,  -/as 
guaranteed  by  the  company .»  In  1907  the  Hamilton  Steel 
and  Iron  Company  was  reorganized  as  the  Hamilton  Iron 
and  Steel  Company,  with  a  capital  of  $3,000,000. 

In  the  mean  time  a  number  of  other  co.tsoHdations  of 
iron  and  steel  interests  had  devclojMHl.  In  T»03  the  Mon- 
treal Rolling  Mills  acquired  the  entire  pri)|)erties  of  the 
Pillow-Hersey  Company  of  Montreal  or  $600,00(>,»  and 
in  1000  it  acquired  the  projMTty  of  the  Hotl^si...  Iron  and 
Tulie  Company,^  and  other  cxi>an.sions  foilowwl.  In  1910 
this  company  was  operating  three  manufacturing  plants 
in  Montreal.* 

In  190.'}  the  Toronto  liolt  and  Forging  Company  bought 
the  McDonnell  Rolling  Mills  of  Toronto  for  $9(),()00.«  In 
1910  a  more  extensive  merger  took  place,  when  Mr.  Wat- 
son, of  the  Toronto  Bolt  and  Forging  Company,^  arranged 
an  amalgamation  of  the  Toronto  Bolt  and  Forging  Com- 
pany, the  GanaP'  >,ue  Bolt  Company,  the  Bellevill<  Iron 
and  Horseshoe  Company,  and  the  Brantford  Screw  Com- 
pany, as  the  Cjmada  Bolt  and  Nut  Company,  with  a  c;i  - 
italization  of  $1,000,000  Ik  nds,  $1,250,(KM)  of  7  per  cent 

•  Iron  Age,  vol.  lxih.  April  iO.  p.  20. 

•  Moniiary  Timm.  vol.  xxxiii.  p.  4.'«. 

•  Iron  Agf,  vol  uxxi.  May  ■iH.  p.  m.         *  Jhitl.,  vr.l.  i  \xm,  p.  jes. 
'  Hailli«-.  VVimmI.  ami  Croft,  (irrulnr,  June  lU,  IIUO,  p.  ;). 

'  CmuitUan  Kngincer,  vol.  x,  j)    IM. 

•  Monetary  Timtf,  vol.  xuv,  p.  7  la. 


THE  COMBINATION  MOVEMENT 


251 


stock.   The 


preferred  stock,  and  $1,250,000  of  common 
sluireholders  of  the  constituent  companies  received  7  per 
cent  cumuhitive  preferred  shares  of  the  new  company,  plus 
a  25  per  cent  common-stock  bonus.'  In  the  case  of  the 
Brantford  Screw  Company,  the  holders  of  Brantford  Screw 
Company  preferred  str  k  received  $145  of  the  new  pre- 
ferred stock  for  every  share  of  the  old  stock  and,  in  addition, 
a  bonus  of  30  per  cent  in  common  stock  of  the  new  com- 
pany;  and  the  holders  of  common  stock  received  $120  of  the 
new  preferred  and  a  30  per  cent  bonus  in  common  sti>ck, 
for  every  share  of  common  stock  in  the  old  company.* 
IMeiinwhile,  the  Canada  Screw  Company  of  Hamilton  had 
al)sorbcd  the  Ontario  Tack  Company,'  and  it  is  interest- 
in},'  to  note  that  in  1907  the  stcK-k  of  the  Dominion  Wire 
Manufacturing  Company  was  purchased  by  W.  II.  Furrell 
and  assf^-iates,  of  the  United  States  Steel  Corporation.* 

Such  preliminaries  prepared  the  way  Tor  further  develop-  i 
Tients  in  1910,  when  the  Steel  Company  of  Camuhi  was  \ 
incorporated  to  acquire  the  business  and  undertakings  or 
the  outstanding  bonds  and  stwks  of  the  Hamilton  Iron 
and  Steel  Company,  the  Montreal  Rolling  Mills  Company, 
the  Canada  Screw  Company,  and  the  Canada  Bolt  und 
Nut  Company.' 

It  was  difficult  for  a  time  to  secure  a  basis  of  amalgama- 
tii.n.  As  early  as  April,  1910,  Mr.  W.  M.  Aitken  had  pur- 
chasi  1  the  M.mtreul  RoUing  Mills  Company  for  $4,200,000 
subject  to  the  $500,0«/0  bond  issue.  But  further  negotia- 
tions ceased  for  a  time,  since  a  basis  of  amalgamation 
<<)uM  not  l)e  agreetl  up«m.*  Ultimately  the  new  comiwiny 
iiutliorizcd  the  issue  of  f.'5,(MM),000  of  jrommon  st<H-k. 
*1(>.(KK),(HK)  of  7  per  cent  cumulative  preferretl  stock,  luid 
$10.(K)0,(KM)  of  6  per  cent  InMids.  Of  these,  $11,500,000  of 


t  : 


'  UtiTilware  and  Mrtal,  January  8,  1!U0. 

'  Mnni-larit  TimfK.  vol.  xi.viii.  p.  8H.        •  Ibid  ,  vol.  xi.iv,  p.  \H\i. 

*  llarduare  and  MiinI,  July  Vi,  I'JIO.  p.  M. 

'  Momlary  Tinut,  vol.  .XLIV.  p.  HU.  •  Ibid.,  p.  18W. 


m 


252    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 


Lb' 


if 


ct)mmon  stock.  $6.500,000 of  prefermi  stotk.  and  $0,850,- 
000  of  bonds  were  issued.  The  capiUdization  was  supposed 
to  be  based  on  the  ascertained  earnings  of  the  Hamilton 
Iron  and  Steel  Comj)any,  the  C^anada  Screw  Company,  and 
the  Montreal  lloUing  Mills  for  the  preceding  years,  and 
the  estimated  earnings  of  the  newly  fo/mtnl  Canada  lk)lt 
and  Nut  ('ompany  an''  )f  the  Dominion  Wire  Manufactur- 
ing Company.'  The  Liferent  concerns  agree<i  that  bonda 
should  1)0  issued  to  the  extent  of  two  thirds  of  the  apprai.sed 
value  of  the  properties,  preferred  stock  to  the  extent  of  one 
third  of  the  appraised  value  of  the  pro|)erties,  together  with 
the  'iipiici  assets,  and  that  common  sttx-k  should  l>e  is.sued 
against  Mic  earning  capacity  a.s  indicated  by  the  history  of 
the  companies,  provided  that  no  dividends  should  l)c  |>aid 
on  common  stock  until  there  wivs  a  sufficient  surplus  in  the 
treasury  to  pay  dividends  on  preferred  stix-k  for  one  year 
in  advance.'  IncidenUdly.  tlie  simrehoU'ers  of  the  Hamil- 
ton Iron  an«l  Stct>l  Company  heid  o!it  for  $9.:JOO,000 of  the 
stock  for  their  $3,(KK).000,  and  the  Montreal  Rolling  Mills 
sharr'iolders  got  $JM)0  ]ier  .share  for  stock  quoted  at  $250.* 
The  holders  of  Dominion  Wire  >fanufacturing  Company 
sttK'k,  yK'(.s«ms  conncctc«i  with  the  I'liitwl  States  Steel 
<\»riH)rHtion  ntvivoil  $250  jht  slum'.*  Siru-c  the  forma- 
tion of  the  «-ompany,  a  further  issue  of  $050,000  of  Ixmds 
has  Ixxni  made  for  im])rovements  and  iulditioiis  in  the  form 
<if  hkI  and  steel  mills,  making  the  total  outstanding  is.sue 
$7.(K)0.(MK).» 

The  iulvantages  of  the  coiisolidation  have  frcfjuently 
l)ecn  stateil.    In  the  first  phuv,  it  wjts  claiiniMi  that  mmIuc- 
tions  vi  .aid  !k^  made  iti  the  cost  of  udniiiii.stration.    The 
Toronto  offuv  of   the  Canada  S<tc\v  Company  was   n- 
UKMlelcd,  and  the  «)ffi<vs  uiul  offiii>  sljtfTs  of  the  Montreal 

'   llardwarr  and  Mt-lal.  J\il\    Hi,  1«10,  p.  S.'S 
'    Stoneiarii  Timrx.  vol    \i\iii,  p.  ;W 

•  lliirdinir,   ,iiiii  St,  till,  Apiil  Mi.   l!ll<».  p    M. 

*  GUiIh.  .Inly  lit,  lOKl,  p   1<        »  Anuuid  litport.  1911. 


THE  COMBINATION  MOVEMENT 


25S 


RoHing  Mills  and  Dominion  Wire  Manufacturing  Com- 
pany were  removed  to  the  Toronto  oflSce,*  and  the  staflf  of 
the  Steel  Company  reorganized.*  The  promoters  hoped 
that  transportation  costs  would  be  lowered  by  letting  each 
mill  look  after  its  own  territory,  and  one  traveler  do  the 
work  formerly  done  by  several.*  Economics  in  the  pu''- 
chsuse  of  supplies  and  materials,  increased  eflSciency  due  to 
siKH*inlization  of  the  individual  plants,  and  the  avoidance 
of  unneccssjiry  duplication  of  work  were  other  obvious 
|M>ssibilities.*  Incidentally,  it  appeared  that  the  Hamilton 
Steel  plant  might  supply  the  raw  materials,  ;>ig  iron,  and 
wire  rods  for  the  finishing  mills,  which  had  been  partly 
sui)plied  by  the  Dominion  Iron  and  Steel  Company.' 

There  are  other  features  of  the  consolidation  which  are 
more  interesting  and  significant.  Many  of  the  finished  arti- 
cles produced  by  the  plants  in  question  are  among  the 
most  highly  protected  iron  and  steel  products;  the  rates 
varying  from  7.5  cents  plus  10  per  cent  under  the  British 
preferential  tariff  to  75  cents  plus  25  per  cent  under  the 
general  tariff  on  iron  and  steel  nuts,  rivets,  washers,  bolt.'*, 
etc.,  or  ?0  per  cent  and  35  per  cent  on  nails,  tacks,  etc., 
luiil  il]  i)er  cent  and  35  })er  cent  on  .screws.*  The  inclusion 
of  the  Doniin.nn  Wire  Manufacturing  Company  was  re- 
f^iinled  as  placing  the  company  in  a  commanding  {)osition 
ill  the  ImiU,  nut,  nail,  and  strrew  markets.  While  competi- 
tion was  not  entirely  eliminated,  it  was  expectetl  that  prices 
would  l)e  held  more  stable  in  the  future.^  The  company 
still  has  the  London  Rolling  Mills  and  the  Graham  Nail 
Company,  and  more  recently  the  I>ominion  Steel  Corj)ora- 
tion  as  chief  comi»etitors,  but  the  Iwalion  of  its  own  plants 

■  Hardware  and  Metal,  August  6,  19IU,  p.  M. 

»  Ibid.,  \ug\tni  «().  llM(t,  p  37. 

•  Mimftary  Tinuit,  vol.  xi.v,  p.  40. 

•  Haillir,  \\(xm1   and  i'n>rt.  ('irrulnr.  1910. 
'  Monrtanj  Timin,  vol    xi  v.  p.  iH 

•  t ■u.>ti>iu»  Turitf .  IlKtT.  Il.iiis.  Hi   17 

'  Hardware  and  Metal.  Juno  t,  1010,  p  Stf. 


p> 


254    THE  C.VNADLVN  IRON  AND  STEEL  INDUSTRY 

at  Lake  Ontario  and  St.  Lawrence  River  ports,  together 
with  proximity  to  the  market,  gives  the  company  a  par- 
ticularly strong  position  in  supplymg  the  hardware  trade.' 

§  4.  IVIany  Canadian  companies  are  the  outgrowth  of  a 
long  period  of  development,  but  few  exemplify  this  fact 
more  than  the  Nova  Scotia  Steel  and  Coal  Company.  As 
we  have  seen,  the  Nova  Scotia  Forge  Company  was  formed 
in  1872  with  a  capital  of  $4,000,  to  manufacture  various 
kinds  of  forgings  from  wrought  and  scrap  iron,  and  a  pro- 
fitable industry  was  carried  on  at  New  Glasgow  and  Tren- 
ton until  1884.  At  that  time  mild  steel  bt^an  to  attract 
attention  in  the  manufacture  of  axles  and  other  forgings; 
so,  to  keep  abreast  of  the  times,  the  Nova  Scotia  Steel 
Company,  with  a  capital  of  $160,000,  was  formed  to  manu- 
facture steel  by  the  Siemens-Martin  open-hearth  process  * 
from  scrap  iron  and  imported  pig  iron.  The  original  forge 
company  l)eoame  a  large  buyer  of  steel  ingots  and  billets 
from  the  new  concern,  which,  in  turn,  was  dependent  for 
its  repair  work  on  the  forge  company.  Hence,  in  1889,  to 
insure  economy  of  ojMjration,  the  two  companies,  which 
were  really  controlled  by  identical  interests,  were  amal- 
gamated as  the  Nova  Scotia  Steel  and  Forge  Company, 
and  extensions  and  additions  were  made  to  the  plant.*  For 
a  time  the  new  company  was  the  only  producer  of  steel  in 
Canada,  and  enjoyed  the  benefit  of  the  protective  tariff.* 

In  1888  the  pDprietors  decided  to  build  a  plant  to  man- 
ufacture pig  iron  for  use  in  the  steel  plant,  but  as  the  risk 
of  the  new  projMisal  was  great,  a  new  company,  the  New 
(Ihisgow  Coal,  Iron,  and  Railway  Company,  was  formed 
with  a  capiUil  of  $1,000.(HH).* 

The  interde|)endence  of  the  steel  works  and  the  blast 

t  Hardware  and  Metal,  June  4.  1910,  p.  39. 

*  Indiutrial  Canatla,  veil,  xi,  p.  SlW. 

•  ('Hnncla,  Rrii'rl  on  Mining  and  Mriallurgiral  Indutlrie.i,  p.  SW. 

•  Journal  of  I  he  Iron  and  Steel  Intlitute,  1895,  no.  1,  p.  588. 

*  Induttrial  Canada,  vol.  xi,  p.  S88. 


THE  COMBINATION  MOVEMENT 


255 


furnace  was  a  large  tactor  in  the  success  of  each.  The  steel 
mills  demanded  an  increasing  amount  of  iron,  much  to  the 
advanta^-''  >t  the  blast  furnace  company,  which  weathered 
the  depression  of  1895  to  1896  with  success.'  The  obvious 
community  of  interest  suggested  the  advisability  of  another 
crmsolidation  as  soon  as  the  practicability  and  success  of 
the  new  project  was  proved.  Consequently,  in  1895,  the 
Nova  Scotia  Steel  Company  was  formed  to  purchase* 
l)oth  plants.  The  steel  works  were  extended,  and  thus  the 
furnace  could  be  operated  more  regularly.*  As  the  pig  iron 
was  entirely  under  its  own  control,  the  company  reduced 
the  cost  of  steel,  and  thereby  secured  orders  that  other- 
wise might  have  gone  elsewhere.* 

la  19()0  the  Nova  Scotia  Steel  Company  purchased  as  a 
going  concern  the  property  and  business  of  the  General 
Mining  Association,  including  leases  of  coal  areas  and  mines 
with  good  shipping  facilities,''  for  $I,500.000.«  In  1901  the 
Nova  Scotia  Steel  and  Croul  Company  was  forme<l  to  take 
o\or  the  projierties  of  the  Nova  Scotia  Steel  Company  with 
its  acquired  prc»perties  of  the  General  Mining  Association. 
Common  stock  amounting  to  $5,000,000  and  $2,000,000 
of  8  per  cent  cumulative  preferred  stocks  were  provided  for. 
Of  these,  $3,090,000  of  common  stock,  with  a  bonus  of 
$1,030,000  of  preferred  shares,  were  issued  to  acquire  the 
I)ro|)erties  of  the  Nova  Scotia  Steel  Company  and  a  bond 
issue  of  $1 ,500,000,  that  had  been  put  out  for  the  purrha.se 
of  the  General  Mining  Association  proi)ertie8.^  The  di- 
rtx'tors  of  the  Nova  Scotia  Steel  Company  became  the 
directors  of  the  new  company,*  which  immediately  entered 
ujMtii  an  era  of  development  at  Sydney  Mines  and  New 
(ilasgow. 

'  Canadian  Mining  Reviev,  vol.  xi,  p.  35. 

'  llnd.,  vol.  XIII,  p.  07.  '  Iron  Age,  vol.  LVi,  p.  1412. 

*  ('(inoilian  Mining  Revietc.  vol.  xv,  p.  456. 

'  Ihid.,  vol.  XX.  p.  106.  •  Monriary  TimeM,  vol.  xxxiv,  p.  108. 

'  Canadian  Mining  Rrrietr.  vol.  xx,  p.  166. 

''  Commercial  and  Financial  Chronicle,  vol.  lAXllI,  p.  70. 


ijn 


III. 


«56    TIIE  C.VNADIAN  IRON  AND  STEEL  INDUSTRY 

liy  1901  the  Nova  Seolia  Steel  and  Coal  Company  had 
griulually  acquired  a  business,  thoroughly  satisfactory  in 
character,  although  capable  of  being  more  fully  extended. 
The  ojmpany  ow-ned  coal  mines  and  iron  ore  l)cds  of  a  very 
extensive  and  desirable  character;  it  produced  its  o\^^l  pig 
iron  u)  f«e(l  its  own  steel  furnaces,  which,  in  turn,  supplied 
a  finishing  plant  that  was  at  that  time  second  to  none  in 
the  country.  The  amalgamations  that  have  been  described 
were  simply  tlic  result  of  a  natural  development.  As  new 
phases  of  the  industry  were  develoiwd,  it  seemed  advisable 
to  test  them  under  the  guise  of  u  new  company,  but  once 
that  phase  wjis  a  pro\ed  success,  the  natural  course  was 
to  amalgamaU"  it  with  the  older  concern  into  a  well- 
rounde<l  industrial  and  financ  iad  organization. 

This  iK)licy  of  financing  conservatively  the  ntver  i>ro- 
jects  has  liecn  followed  down  to  the  present  time.  In  1912 
the  Eastern  Car  (  .mipuny  war.  formed  by  the  same  inter- 
ests to  carry  on  the  business  of  car-building.  The  direc- 
torate of  the  company  is  practii  ally  the  same  as  that  of 
the  Nova  S<i>lia  Steel  and  CtKil  ConiiKUiy.  and  the  entire 
issue  of  common  stock  has  l)ecn  Uiken  up  by  'Scotia," 
while  the  princiiial  and  interest  of  a  $1,000,000  bond  issue 
is  guarantwnl  by  the  same  company.'  In  short,  any  con- 
solitlation  of  'nmiMUiies  now  represented  by  the  Nova 
Scotia  Steel  and  Coal  Company  is  simply  a  natural  phase 
of  the  expansion  of  business  into  new  lines  and  an  illus- 
tration of  inti;gration  of  industry,  rather  than  a  combina- 
tion of  competing  firms. 

§  5.  The  Dominion  Stt-t-l  CoqMiration  with  a  capitaliza- 
tion of  alKiut  $70,(WM),(MM».  including  the  funde<l  debt  and 
the  prcfcrrcil  and  connnon  sUkUs  of  the  constituent  com- 
panies not  yet  j)urcliused  by  the  corporation,  is  said  to  lie 
the  largest  iiidustriiil  consolidation  of  re<'ent  years  in  Can- 
aii;i    Frctjuentiy,  lliis  corjMiration  is  dis«'us.sed  as  a  stH'ond 

'   Monetary  Timii'.  vol.  XLvm,  p  iiiS. 


THE  COMBINATION  MOVEMENT 


«57 


"Steel  Trust."  controlling  prices  indiscriminately.  The 
truth  is  that  the  original  Dominion  Steel  Corjjoration  was 
simply  an  amalgamation  of  two  interdependent  companies 
(loiuj?  entirely  dilTerent  kinds  of  business. 

The  Dominion  Iron  and  Stt'^l  (\)mj)any  was  forme<l  in 
1H!)9  hy  the  interest  haekof  the  Dominion  Coal  C'ompany. 
As  the  new  industry  was  to  provide  a  profitable  market  for 
eoal,  the  first  link  between  the  two  companies  was  joined 
and  ever  since  they  have  been  closely  connected. 

On  June  20,  1899,  a  contract,  signed  by  the  two  com- 
panies, f)rovided  for  a  supply  of  coal  at  $1.20  per  ton.  The 
Dominion  Iron  and  Steel  C'ompany  was  given  the  right, 
up  t«>  January  1,  1903,  to  lease  the  Dominion  Coal  Com- 
pany properties,  paying  all  the  hitter's  fixed  charges  and 
(i  per  cent  on  the  common  stock,  provided  that  if  at  any 
time  the  outjiut  of  coal  should  exceed  3,500,000  tons  au- 
iiiially,  the  lessee  shoultl  i)ay  the  lessor  an  additicmal  15 
cents  per  ton,  and  that  $(W)<),0()0  should  l)e  dei)osited  l)efore 
the  lease  should  go  into  effect,  to  he  forfeited  in  ca.se  the 
Icssw  should  fail  to  nuike  the  payments  called  for  in  the 
lease.'  That  bituminous  coal,  run-of-mine,  was  selling  at 
this  time  in  Montreal  at  $2.72  rather  reflects  on  the  merits 
of  the  (•ontra<-t  fron.  the  coal  company's  point  of  view,' 
considering  that  freight  charges  to  Montreal  were  about  $1.' 

In  I'JUl  Mr.  Whitney,  "on  a(x»unt  of  poor  health," 
soi«l  a  coil!  rolling  interest  in  the  (-ompanies  to  James  Ross 
and  Canadian  iksstK-iates  of  his  in  Montreal,  amd  Mr.  llosi- 
was  elected  i)resident  of  the  comi)anies.* 

In  April,  \WH,  the  opiK>rtunity  to  lease  the  properties 
of  the  Dominiun  Coal  Company  was  taken  up.  Contrary 
to  the  exiK-'ctatiim  that  the  earnings  of  the  company  would 
pay  its  own  dividends,  plus  interest  on  the  bonds  and  tlie 


« 


'  Commrrrial  and  Financial  Chronicle,  vol.  ijcnt,  p.  79. 

'  Whnhsalf  Prirm  in  CanaAi  ,  ISUl-  I'.Hl,  p.  19«. 

'  Cutuiciu,  Hiimrt  on  Mintng  ami  Mrtallurgical  ]nduiitriea,  p.  5tf7. 

*  Commercial  and  Financial  Chronicle,  vol.  Lxxni,  p.  1207. 


>''1, 


.258    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

dividends  on  the  preferred  stock  of  the  Dominion  Iron  and 
SuM'l  Company,  and  that  substantial  returns  would  fall  to 
tiie  (.minum  stock  of  the  steel  company,'  the  steel  com- 
pany was  soon  carr>inj,'  a  lurKC  floating  debt,*  and  could 
noi  M  ciiou^'h  capiUil  to  conii)letc  it.s  finishing  mills  and 
at  111''  same  time  <-arry  on  t»>t  coal  business.  ()n  the  other 
han(i,  tlie  coal  company,  which  wjis  very  strong  financially, 
could  develop  the  coal  property  without  being  hampered 
by  want  of  cai)ital.'   Besides,  it  claimed  that  the  Domiii- 
ion  Iron  and  Steel  Company  had  an  undue  opportunity  to 
deplete  and  plunder  the  coal  mines.  At  this  time  Mr.  Koss 
n>si«ned  the  j)rcsidency  of  the  Dominion  Iron  and  Steel 
Company,  and  Mr.  J.  11.  Plummer.  who  had  alnwly  been 
elected  to  the  InMird,  was  chosen  to  take  his  place.    The 
lease  was  revoked,  and  a  new  coal  contract  providing  for 
tlic  delivery  of  a  quantity  of  freshly  mined  run-of-minc 
coal,  necessary  for  four  blast  furnaces  and  accessories,  was 
agreed  upon,  on  amdition  that  the  coal  company  was  given 
the  option  of  supplying  slack  coal  after  four  years,  if  not 
to  the  disadvantage  of  the  steel  conii)any.*    In  1905  the 
Dominion  Iron  and  Steel  Company  gave  notice  for  a  large 
amount  of  coal  for  new  fumjices  which  would  \)C  put  in 
operation  during  IDOfi.   The  co:d  company,  whi'-h  found 
it  (!i(fi<  ult  to  meet  these  demands  without  curt^iiling  the 
supply  to  other  customers,  who  were  purchasing  coal  at 
more  remunerative  prices,  proceeded  to  open  an«)ther  pit 
on  wliat  they  iK'licvcd  to  l)c  the  Phelan  seam,  wliich  had 
been  eliosen  by  the  steel  company  to  sui);;.y  the  j)roi)er 
kind  of  c«)al.   But  the  coal  from  the  new  mine  was  fo\  id, 
on  analysis,  to  be  useless,  was  rejected  by  the  steel  com- 
pany, an<l  many  '■onsigninents  were  taken  back  by  the  coal 
company. 


•  Commrrrial  and  Finiin  -ial  Chronifl'',  vol.  LXXIV,  p.  83€. 
'  (  ,iniuli(iu  Ainuiiil  /fcnVic,  1!M)S.  )).  .5(»7 

'  Ciniimirricd  <inil  tiiuiiKial  Chronicle,  vol.  LXXVU,  p.  'MO. 

*  StalLii,  vol.  LIU,  p.  iHi. 


THE  COMBINATION  MOVEMENT 


259 


After  some  discussion  it  wjus  af?ree<l  that  the  steel  com- 
pany should  acxT'jjt  for  siKH-ial  purfioses  75  tons  jier  day 
from  the  new  mine,  if  it  was  specially  carded,  so  that  it 
would  not  get  inixetl  with  coal  for  use  in  the  coke  ovens. 
This  arrangement  was  continutHl  for  sonic  months,  and 
henceforth  the  chief  diliiculty  was  with  the  quantity  de- 
livered. As  the  coal  company,  in  1905  and  1906,  never 
quite  supplied  the  needs  of  the  steel  company,  except  in 
winter  months,  the  steel  company  had  to  purchase  (X)al 
elsewhere  at  higher  figures  in  order  to  operate  the  plant 
efficiently.  Under  temporary  agreement  the  steel  cora- 
[)any,  to  assist  the  coal  company,  agreed  to  ac*cept  a 
lK)rtion  of  the  deliveries  in  slack  and  hanked  coal;  hut  as 
deliveries  l>ecame  still  r.orc  unsatisfactory,  the  manager 
of  the  steel  company  f.ave  notice  in  October,  190<J,  that 
only  fr-shly  mixej  run of-iiu.ie  coal  from  the  Phelan  seam 
wou'il  he  aci-»-|  ted.  .\Hci  Novcmlier  I,  1906,  the  coal 
was  srnt,  marked  siiuj^ly  "Run-of-Mine,  Phelan  Seam," 
thoi;^ii  ip.alysis  showed  that  much  of  it  was  from  the  new 
pit  riid  so  hi{''.  a  s-  'rlmr  as  to  be  useless  in  the  manu- 
facture of  iion  and  stcei.  When  protests  were  made  and 
i..)tice  was  given  that  all  coal  c  mtaining  sulphur  in  ex- 
ci'ss  of  4  iHT  cent  would  ly>  rejected,  the  coal  conjpany 
pi'.vc  notice  that  the  steel  •  •)rnpany's  action  was  inter- 
prete<i  as  a  clear  repudiation  of  the  cx>ntract,  which  it 
shoulil  consider  as  terminate<i.  Wlicn  the  coal  company 
ceased  supplying  cojil,  the  steel  works  were  temporarily 
closc<l  until  coal  could  Iw  securfnl  elsewhere  at  an  increased 
cost,'  which  was  charge<l  f  the  Donunion  Coal  Company. 
A  suit  for  damages  was  -omptly  launched  by  the  steel 
company  against  the  coa.  company.  In  1907  Judge  Long- 
ley,  of  Sydney.  «lecided  in  favor  of  the  steel  company,  but 
the  case  was  subsequently  carried  to  the  higher  court  and 
finally  to  the  Privy  Council.*  All  offers  of  settlement  made 

'  iVora  Scotia  Late  Rrporlg,  ]!H)9,  pp.  8(V-91. 

*  Commercial  and  Financial  Chronicle,  vol.  lxxxv,  p.  800. 


'il 


■ 


m 


«60    THE  CiVNADIAN  IRON  AND  STEEL  INPrSTRY 

by  the  coal  company  won-  rejected,'  ai^d  finally,  in  1910, 
the  Privy  Council  declared  in  favor  of  the  steel  company, 
but  the  coal  company,  owin^;  to  the  increasing  <\>ni  ■.  o.  pro- 
ducing coal  and  the  increasing  price,  was  given  the  power  to 
declare  the  contract  at  an  end.'  In  1910  tli*'  claiins  of  tlie 
steel  company  were  paid  up,  and  a  price  of  $1.55  for  luU 
was  decided  upon,  a  price  which  represented  an  advance 
to  the  coal  company  of  $^16,000  on  an  output  of  800.000 
tons  per  year.'  Back  dividends  on  the  preferred  stock  of 
the  Dominion  Iron  and  Steel  Company,  which  hatl  not  been 
paid  since  1903,  were  fully  paid  up,  and  financial  condi- 
tions became  favorable  for  further  devel«j{>ment. 

During  the  period  of  conflict,  the  amalgamation  of  the 
two  companies  was,  on  several  occasions,  sugj^ested  as  a 
solution  of  the  whole  difficulty.  In  March  of  1907  there 
was  a  pronounced  effort  to  take  the  control  of  the  coal 
company  out  «)f  the  hands  of  Mr.  Ross  and  his  associates. 
Many  shareholders  of  the  coal  company  were  dissatisfied 
with  the  manjigement  and  were  giving  their  proxies  to  cer- 
tain steel  interests.*  In  1907  a  bill  was  introduced  in  the 
Nova  Scotia  Legislature  to  permit  the  Dominicm  Iron  and 
Sti'el  Company  to  guarantee  the  payment  of  principal  and 
interest  of  bonds  or  other  securities  of  companies,  the  ma- 
jority of  whoHf  stock  was  held  or  controlled  by  that  com- 
pany. It  wjks  siiid  tliat  the  company  had  ar(iuired  coal 
areas  in  ('!ii)c  Breton  and  wanted  to  form  a  subsidiary 
company  to  operate  the  same.'  Later  in  the  year  *  2000 
shares  of  the  New  Brunswick  Iron  Company  were  pur- 
chjweil  at  $i5  \wr  share. 

In  June  of  1907  Mr.  Ross  was  in  possession  of  a  large 
quantity  ^f  Dominion  Iron  and  Steel  Company  stock, 
vliich  he  had  t)een  buying  quietly  that  year,  to  such  an  cx- 

'  Commrrnai  and  Finnncial  Chronidf,  vol,  LXXXVI,  p.  1591. 

'  Ibid.,  vol.  Lxx XVIII,  p.  5(/8. 

»  Monetary  Times,  vol   xi.iv,  p.  1014.  •  Ibid.,  vol.  r.h,  p.  1411. 

'  ComT'it-dal  and  Financial  Chronirle,  vol.  lxxxiv,  p.  89fl. 

•  Canailian  Mining  Journal,  vol.  xxviii,  p.  031. 


THE  COMBINATION  MOVEMENT 


«81 


tent  that  he  haul  become  the  largest  stockholder."  He  con- 
t lulled  enough,  it  was  thoufiht.  to  Rive  the  coal  people* 
control,  and  efforts  were  mode  to  obtain  control  of  the 
meeting  of  the  steel  company  to  l>e  held  in  June,  1907.« 
But  the  meeting  was  postix)ned  indefinitely  to  avert  danger, 
and  the  coal  company's  scheme  failed.* 

From  the  point  of  view  of  the  coal  company  an  amal- 
gumation  scheme  seemed  desirable,  since  unity  might  make 
it  jHJssible  for  the  steel  company  to  accept  slack  coal,  which 
it  had  refused  to  accept  largely  because  it  wished  tomain- 
Uiin  a  favorable  contract  with  the  coal  company.  Instead 
of  simplifying  matters,  the  provision  for  an  arbitration  of 
the  price  at  the  ^rd  of  every  five  years  complicated  the 
situation  by  adding  a  continued  element  of  uncertainty.* 
The  Dominion  Iron  and  Steel  Company  was  interested  in 
au  jwlcquate  supply  of  coal  of  proper  quality  .•  As  early  as 
1908  it  was  suggested  that  amalgamation  would  be  of  value 
in  the  employers'  opposition  to  the  intrusion  of  interna- 
tional unionism  in  Nova  Scotia.^ 

In  November,  1909,  Mr.  Ross  conftrmed  a  report  that  he 
had  sold  to  a  syndicate,  representing  the  Domiiuon  Iron 
and  Steel  Company,  $5,000,000  of  common  stock  at  $95 
per  share,  on  condition  that  all  shareholders  be  offered  the 
same  terms  and  be  given  an  opportunity  to  deposit  their 
shares  within  thirty  days,  duly  assigned  and  endorsed.  It 
was  provided  that  if,  at  the  end  of  the  thirty  days,  the  syn- 
dicate shoidd  fail  to  make  satisfactory  arrangements,  Mr. 
Ross  should  have  the  right  to  terminate  negotiations.  The 
shares  were  to  be  paid  for  by  $45  in  cash  in  thirty  days,  and 
ten  installments  of  $7  per  share,  payable  at  intervab  of 


Commcreicd  and  Financial  Chronide,  vol.  lxxjcv,  p.  10*. 

SlaliM,  vol.  LXlll,  p.  688. 

Comm.reial  and  Financial  CkronieU,  vol.  uucxv,  p.  866. 

Monetary  Timet,  vol.  XLI,  p.  13. 

.Vi)r<i  Scntia  Law  Report*.  1909,  p.  143. 

Monetary  Timet,  vol.  xuil,  p.  4113. 

('  aadian  Annual  Rentv.  1908,  p.  296. 


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262    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

three  months  for  two  and  one  half  years  with  interest  at 
4i  per  cent,  payable  quarterly.  Holders  of  over  45,000 
shares  had  agreed  to  retain  their  shares  and  to  participate 
in  the  proposed  combination  to  the  extent  of  their  hold- 
ings, i  In  fact,  not  more  than  4000  shares  were  so  deposited, 
and  the  holders  were  paid  off  at  once.* 

At  the  annual  meeting  of  the  Dominion  Coal  Company, 
on  April  12,  1910,  the  possibility  of  consolidation  and  the 
relations  to  the  Dominion  Iron  and  Steel  Company  were 
informally  discussed,^  It  was  urged  that  the  board  should 
be  representative,  not  only  of  the  steel  company  and  its 
friends  as  shareholders,  but  of  other  shareholders  as  well, 
and  a  promise  was  made  that  Mr.  Butler,  the  new  general 
manager  of  both  companies,  woidd  carry  on  the  manage- 
ment and  relations  between  the  two  companies  in  a  strictly 
impartial  manner.   The  basis  of  a  proposed  merger  was 
considered  at  some  length.  Mr.  Plummer  said  that  the  fact 
that  holders  of  40,000  to  50,000  shares  would  have  to  be 
willing  to  accept  the  steel  company's  terms  ought  to  be  an 
ample  safeguard  against  any  unfair  treatment.   Unfortu- 
nately, the  earnings  of  both  companies  were  threatened, 
those  of  the  coal  company  by  a  miners'  strike,  and  those 
of  the  steel  company  by  the  loss  of  the  bounties.  Further- 
more, it  seemed  difficult  to  estimate  the  value  of  either  the 
coal  beds  or  the  iron  ore  deposits.    Mr.  Plummer  felt  as- 
sured that  the  mei^er  would  be  a  splendid  consolidation  of 
one  of  the  finest  coal  fields  in  America,  the  finest  ore  de- 
posit on  tidewater  on  the  continent,  and  an  excellent  steel 
plant  admirably  situated;  and  he  declared  that  neither  of 
the  companies,  with  all  their  properties,  would  be  nearly 
so  strong  separately  as  they  would  be  combined.  There- 
fore, he  recommended  amalgamation. 

On  April  20,  1910,  a  statement,  submitted  to  the  share- 
holders of  the  Dominion  Coal  Company  and  the  Dominion 

'  Commercial  and  Financial  Chronicle,  vol.  lxxxix,  p.  1350. 

»  Ibid.,  vol.  xc,  p.  70«.  »  Annual  Report,  1909,  pp.  14-19. 


TEtE  COMBINATION  MOVEMENT 


263 


Iron  and  Steel  Company  on  behalf  of  their  respective  boards 
of  directors,  proposed  a  union  of  the  interests  of  the  share- 
holders of  the  coal  and  steel  companies  by  an  exchange  of 
one  share  in  the  common  stock  of  the  Dominion  Steel  Cor- 
poration and  $4  in  cash  for  each  share  of  common  stock  of 
the  Dominion  Coal  Company  and  Dominion  Iron  and  Steel 
Company,  with  the  cash  consideration  payable  in  quar- 
terly installments  of  $1  per  share.  This  payment  of  cash  was 
equivalent  to  a  dividend  of  4  per  cent  per  annum  for  one 
year,  and,  while  forming  part  of  the  purchase  price,  was 
intended  to  obviate  any  call  on  either  company  for  divi- 
dends until  the  coal  strike  and  its  effect  had  passed  away 
and  the  new  plant  of  the  steel  company  was  completed. 
The  surplus  earnings  were  to  be  used  for  strengthening  the 
financial  position  of  the  two  companies  and  for  making 
permanent  improvements. 

Such  were  the  conditions  under  which  the  consoli- 
dation was  initiated.  The  probability  that  no  dividends 
would  be  paid  on  the  stocks  of  the  constituent  companies 
decided  the  question,  and  by  November  1,  1910,  98.8  per 
cent  of  the  entire  common  stock  of  the  iron  and  steel  com- 
pany and  97.6  per  cent  of  the  entire  common  stock  of  the 
coal  company  had  been  exchanged.  On  that  date  $1,500,- 
000  of  5  per  cent  Dominion  Steel  Corporation  three-year 
debentures  were  issued  to  provide  for  the  payment  of  $4 
per  share  on  the  shares  acquired.  The  steel  corporation 
promised  not  to  issue  any  bonds  secured  by  mortgage  while 
these  debentiu«s  were  outstanding.'  Provision  was  made 
also  for  a  possible  issue  of  preferred  stock  of  the  steel  cor- 
poration to  redeem  the  preferred  stocks  of  the  constituent 
companies  by  exchange  share  for  share.' 

In  this  way  the  two  interdependent  companies,  whose 
history  had  been  marred  by  a  series  of  diflEicult  relations, 
entered  on  a  period  of  peaceful  union  imder  one  manage- 

•  Dominion  Securities  Corporation,  Circular,  November  1,  1910. 
'  Prospectus. 


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£64    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

ment.  The  real  purpose  of  consolidation  was  the  assurance 
of  a  satisfactory  supply  of  coal  to  the  steel  plant  at  a  price 
satisfactory  to  the  coal  company.  To  the  extent  that  stock- 
holders of  the  constituent  companies  accepted  shares  of  the 
holding  company,  the  two  interests  became  identical,  and 
although  tae  two  constituent  companies  still  exist,  that 
separate  existence  is  nominal,  except  for  the  interest  ol 
a  very  few  independent  holders  of  common  shares  of  the 
Dominion  Iron  and  Steel  Company  and  the  Dominion  Coal 
Company,  as  well  as  the  holders  of  bonded  indebtedness 
and  preferred  stock  of  the  same  companies. 

The  principle  of  securing  control  of  coal  areas  was  car- 
ried further  by  the  leasing  of  the  properties  of  the  Cumber- 
land Railway  and  Coal  Company  in  1910.  It  is  said  that  the 
option  was  taken  by  the  Dominion  Iron  and  Steel  Com- 
pany while  the  coal  contract  dispute  was  on,  with  the  ob- 
ject of  securing  their  own  coal  supply  should  the  contract 
be  broken.^  The  Cumberland  Railway  and  Coal  Company 
had  been  incorporated  in  1883  as  a  consohdation  of  the 
SpringhtU  and  Parrsboro  Coal  and  Railway  Company  and 
the  Springhill  Mining  Company.  It  owned  about  thirteen 
square  miles  or  150,000,000  tons  of  good,  clean  coal,  besides 
a  railway  of  forty-two  miles  and  sidings  of  sixteen  miles, 
exclusive  shipping  piers  at  Parrsboro,  and  a  fleet  of  tugs 
and  ocean  barges  for  coal-carrying.^  It  was  capitalized  at 
$1,000,000  of  common  stock  and  $1,500,000  of  first-mort- 
gage 6  per  cent  bonds.'  In  December,  1910,  Mr.  Plummer 
announced  that  a  controlling  interest  in  the  company  had 
been  transferred  to  the  leadmg  directors  of  the  Dominion 
Steel  Corporation.*  This  seemed  necessary  because  of  a 
clause  in  the  circular  of  April  20,  1910,  providing  that 
further  issues  of  stock  would  not  be  made  without  the 
sanction  of  the  stockholders.   But  at  the  annual  meeting 

*  Canadian  Mining  Journal,  vol.  xxxi,  p.  218. 

*  Commercial  and  Financial  Chronicle,  vol.  xci,  p.  1629. 

»  Monetary  Times,  vol.  xlv,  p.  2418.  *  Ibid.,  p.  2340. 


THE  COMBINATION  MOVEMENT 


265 


of  the  Dominion  Steel  Corporation  on  May  19, 1911.  6000 
shares  of  the  Dominion  Steel  Corporation  were  issued  in 
exchange  for  20,000  shares  of  the  Cumberland  Railway  and 
Coal  Company.  1  In  addition,  $979,000  of  the  company's 
6  per  cent  bonds  were  redeemed  by  an  issue  of  $1,174,000 
of  5  per  cent  bonds  ^  guaranteed  by  the  steel  corporation.' 
The  holding  company  form  of  consolidation  was  ^ain 
called  mto  operation  in  1910,  when  the  Dominion  Coal 
Company  decided  to  incorporate  the  Sydney  and  Louis- 
burg  Railway  Company,  to  which  the  valuable  railway 
property  directly  operated  by  the  coal  company  might  be 
transferred.  This  was  done  in  the  belief  that  the  railway 
could  be  more  satisfactorily  carried  on  by  an  independent 
company  controlled   by  the  coal  company  through  the 
ownership  of  all  the  capital  stock  of  the  railway  company.* 
In  1911,  2500  shares  of   Dominion  Steel  Corporation 
common  stock  were  issued  to  acquire  the  stock  of  the  Syd- 
ney Lumber  Company,  which  owned  a  good  property,  con- 
sisting of  sawmills,  timber  Umits,  and  a  large  stock  of  lum- 
ber at  Dalhousie,  New  Brunswick.  The  same  method  was 
followed  in  securing  control  of  the  Black  Diamond  line  of 
steamships,  owned  by  the  company.* 

Another  feature  of  the  Dominion  Steel  Corporation 
illustrates  modem  uitegration  of  industry.  The  constitu- 
ent company  known  as  the  Dominion  Iron  and  Steel  Com- 
pany owns  not  only  iron  ores,  blast  furnaces  and  steel  fur- 
naces, but  also  coke  ovens,  and  finishing  mills  built  by  the 
company  itself  from  time  to  time  as  the  market  seemed  to 
warrant  extensions  of  the  business.  Had  these  branches  of 
the  busmess  been  acquired  through  amalgamation  with 
other  companies  or  the  purchase  of  stocks  of  other  com- 
panies, the  public  would  undoubtedly  have  considered  such 

I  Annual  Report,  1911,  p.  15.  *  Ibid.,  p.  7. 

'  Commercial  and  Finavcial  Chronicle,  vol.  xci,  p-  1774. 
*  Annual  Report,  190»,  pp.  6  and  80. 
»  Ibid..  1912.  pp.  10-11. 


,  \i 


.m^^m^'iss^- 


li; 


I'D 


m 


Ji: 


IS 


tl: 


266    THE  CANADL\N  IRON  AND  STEEL  INDUSTRY 

operations  as  an  example  of  the  tightening  of  the  grip  of 
a  great  industrial  octopus,  a  Canadian  "Steel  Trust."  As 
a  natural  development  of  the  business,  the  operation  is 
practically  uncriticized,  and  justly  so,  for  it  has  simply 
aided  in  the  reduction  of  costs  of  the  various  marketable 
products. 

It  is  rather  early  to  judge  the  merus  of  the  consolida- 
tion, but  a  few  statements  may  be  made.  In  the  first  place, 
friction  between  the  two  most  important  companies  has 
been  entirely  and  permanently  eliminated,  much  to  the 
advantage  of  both.  A  constant  supply  of  coal  for  the  iron 
and  steel  plant  and  for  other  pr-poses  is  now  assured,  and 
by  the  acquisition  of  the  Cumberland  properties,  which 
have  smce  been  discovered  to  be  more  valuable  than  was 
anticipated,^  the  open  market  may  be  easily  cared  for. 
Whether  or  not  the  consolidation  of  the  coal  companies  so 
concentrated  the  power  of  the  mine-owners  as  to  bring  to 
an  end  the  succession  of  striKes,  which  had  almost  become 
a  part  of  the  coal-mining  situation,  is  difficult  to  say,  but 
in  1911  the  strike  was  ended,  much  to  the  satisfaction  of 
the  companies.   In  short,  one  may  regard  the  Dominion 
bteel  Corporation  as  the  result  of  a  wise  and  conservative 
organization  of  various  allied   interests  into  a  weU-inte- 
grated  system. 

§6.  At  times  some  financial  and  industrial  menagerie 
finds  its  way  into  the  hands  of  one  person.  We  have  al- 
ready  seen  how  Mr.  Clergue  gradually  developed  industry 

fgo.'  Ifr'"^  f.  ^f.  ^''-  ^^"""'  ^"*^"-  When,  in 
1902,  the  Consohdated  Lake  Superior  Company  coUapsed. 

L^^<Z^  ''''  °^  $35,000,000  preferred  stock  and 

$82,000,000  common  stock,^  and  owned  practically  all  the 
stocks  of  the  Ontario  Lake  Superior  Company,  the  Algoma 
Steel  Company,  the  Michigan  Lake  Superior  Company, 

'  Annual  Report,  1912,  p.  18. 

'  Commercial  and  Financial  Chronicle,  vol.  lxxi.  p.  938. 


f  t 


THE  COMBINATION  MOVEMENT 


287 


the  Tagona  Water  and  Light  Company,  the  "Soo"  Pulp 
and  Paper  Company,  the  International  Transit  Company, 
the  St.  Mary's  Traction  Company,  the  British-American 
Express  Company,  and  the  Manitoulin  and  North  Shore 
Railway.'  After  the  reorganization  of  these  companies 
into  the  Lake  Superior  Corporation,  the  Algoma  Iron 
Works  and  the  Lake  Superior  Iron  and  Steel  Company 
were  added  to  the  list  of  subsidiaries.'  In  1910  the  Can- 
nelton  Collieries  of  West  Virginia  were  purchased  and 
operated  by  the  Cannelton  Coal  and  Coke  Company, 
whose  shares  were  all  bought  up  by  the  Lake  Superior 
Company,  and  the  stock  of  the  Fibom  Limestone  Company 
of  Michigan  was  pm  chased  outright.  In  1912  an  impor- 
tant financial  readjustment  took  place.  The  Algoma  Steel 
Corporation,  formerly  the  Lake  Superior  Iron  and  Steel 
Company,  whose  stock  was  owned  by  the  Lake  Superior 
corporation,  took  over  the  plant,  properties,  and  business 
of  the  Algoma  Steel  Company,  the  Lake  Superior  Power 
Company,  the  Algoma  Commercial  Company,  and  the 
Cannelton  Coal  and  Coke  Company.'  New  bonds  of  the 
Algoma  Steel  Corpomtion,  whose  business  and  properties 
constitute  the  best  and  largest  assets  of  the  Lake  Superior 
Company,  are  guaranteed  by  the  parent  company.* 

As  a  "trust"  the  Lake  Superior  Corporation  is  obviously 
of  little  importance.  It  is  merely  a  holding  company  that 
unites  the  companies  which  have  from  time  to  time  been 
formed  to  develop  separate  branches  of  the  corporation's 
business  and  interests.  Its  subsidiaries  are  not  former  com- 
petitors in  any  respect,  not  even  in  their  demand  for  the 
superabxmdant  power.  In  short,  the  Lake  Superior  Cor- 
poration is  simply  an  example  of  extraordinary  and  exag- 
gerat«»d  integration  of  industry,  which  has  grown  up  more 
by  accident  than  because  of  any  industrial  merits. 


l-'i 


t 


'  Canadian  Annual  Review,  1903,  p.  515. 

'  The  Annual  Financial  Review,  Canadian,  April,  1911,  p.  196. 

•  Ibid.,  November,  1912,  p.  99.      *  Iron  Age,  vol.  lxxxix,  p.  1171. 


n  1 


jH 


868    THE  CAN.\DIAN  IRON  AND  STEEL  INDUSTRY 


|: 


II 


§  7.  The  combination  movement  is  not  altogether  a 
recent  feature  of  Canadian  industry.  Indeed,  combinations 
of  varying  character  have  existed  for  a  considerable  time. 
Mr.  George  McDougali,  who  had  leased  the  car-wheel 
foundry  at  Three  Rivers  in  1875,  found  it  necessary  in  1883 
to  supply  his  charcoal  iron  by  the  purchase  and  operation 
of  the  Radnor  Forges.  As  this  supply  of  iron  was  insuflS- 
cient,  two  more  furnaces  were  built  at  Drummondville, 
Quebec.  Car  wheels  were  manufactured  at  '  hree  Rivers 
and  Montreal,^  Quebec,  and  at  St.  Thorn-  atario.  In 
1899  the  Canada  Iron  Furnace  Compan'  ..as  formed  to 
acquire  the  Radnor  Forges  and  a  car-wheel  foundry  at 
Three  Rivers,  and  the  industry  was  carried  on  with  suc- 
cess.^ In  1900  this  Canada  Iron  Fiunace  Company  built 
another  lant  at  Midland,  Ontario.  In  the  mean  time,  the 
Canada  Iron  and  Foundry  Company  controlled  car-wheel 
and  pipe  foundries  at  Three  Rivers,  Montreal,  St.  Thomas, 
Hamilton,  and  Fort  William,  and,  through  acquisition,  the 
foimdry  at  Londonderry;  and  John  McDougali  and  Com- 
pany owned  the  furnaces  at  Drummondville,  Quebec.'  In 
1902  the  same  interests,  comprising  the  Drummonds,  Mc- 
Dougalls,  and  the  McCalls  of  Montreal,  purchased  the 
plant  of  the  Londonderry  Iron  Company  after  Drummond, 
McCall,  and  Company  had  for  some  years  used  part  of 
the  plant  in  the  manufacture  of  water  pipe.*  The  London- 
derry Iron  and  Mining  Company  was  formed  with  a  capi- 
tal of  $1,000,000  to  acquire  the  said  properties."  In  1904 
the  Torbrook  ore  deposits  were  purchased,*  and  in  1905 
the  Annapolis  Iron  Mining  Company,  with  a  capital  of 
$1,000,000,  was  formed  to  carry  on  this  phase  of  the  workJ 


'  Bartlett,  op.  cit.,  p.  519. 

*  Canadian  Mining  Review,  vol.  xn,  p.  45. 

Monetary  Times,  vol.  xu,  p.  2125. 

Iron  Age,  vol.  uxx,  October  2,  1906,  p.  16. 

Canada,  Report  on  Mining  and  MetaUurgical  Industrie!,  p.  640. 

Canadian  Mining  Reviev},  vol.  xxii,  p.  204. 

Ibid.,  vol.  xxvui,  p.  72. 


THE  COMBINATIOy  MOVEMENT 


S09 


In  1908  the  Drummond  Mining  Compan:,  was  formed  to 
acfiuire  the  newly  discovered  ore  deposit  at  Bathurst,  New 
Tirunswick.' 

Thus,  a  group  of  industries  had  been  evolved,  donunated 
by  the  same  interests.  Drummond,  McCall.  and  Company, 
a  firm  of  iron  and  steel  merchants  in  Montreal,  practically 
controlled  the  marketing  of  all  of  the  products.'* 

In  1908  occurred  the  first  important  merger  in  the  m- 
dustry  that  had  received  so  much  in  bounties,  when  these 
allied  firms  were  amalgamated  as  the  Canada  Iron  Cor- 
poration, with  a  capitalization  of  $3,000,000  of  6  per  cent 
preferred  stock,  $5,000,000  of  common  stock,  and  $2,920,- 
000  of  first-mortgage  bonds  and  $2,500,000  of  consolidated 
bonds.'  Bessemer  iron  mines  in  Ontario  were  also  ac- 
quired.* Bonds  were  issued  to  redeem  bonds  of  the  con- 
solidated companies,  and  preferred  and  common  stocks 
were  issued  as  fully  paid  to  the  vendors  in  consideration  for 
mines,  blast  furnaces,  and  foundries  hitherto  owned  and 
operated  by  the  merger  companies.'  Thus,  in  1909  the 
Canada  Iron  Corporation  owned  four  iron-ore  mines,  five 
blast  furnaces  and  foundries  in  seven  towns  and  cities,  in 
three  Provinces  of  Canada,  and  produced  iron  ore,  pig  iron, 
car  wh        »» t-iron  pipe,  and  special  castings  of  all  kmds." 

§  L.  "  iO  a  syndicate,  composed  of  Mr.  K.  W. 
Blackweli,  president  of  the  Investment  Trust  Company 
and  of  the  Montreal  Steel  Works,  with  W.  F.  Angus, 
vice-president  and  general  manager  of  the  Montreal  Steel 
Works,  offered  to  purchase  the  Montreal  Steel  Works 
on  a  basis  of  137^  plus  a  7  per  cent  dividend  on  common 
stocks  of  that  company,  and  the  directors  agreed  to  sell, 

1  Canadian  Mining  fLview,  vol.  xxn,  p.  540. 
«  Industrial  Canada,  vol.  -o,  p.  713. 

•  Annual  Financial  Review,  Canadian.  November  Supplement,  1912, 

p.  76. 

•  Canadian  Mining  Journal,  vol.  xxix,  p.  636.  '  Prospectus. 

•  Canadian  Annual  Review,  1909,  p.  671. 


is! 


.      i  &    El 


I   1  !  • 

II!: 


Ill 


IP 


270    THE  C.VNADIAN  IRON  .VND  STEEL  INDUSTRY 

subject  to  the  consent  of  55  per  cent  of  the  stockholders.' 
The  assent  of  more  ilian  this  proportion  had  been  secured 
previous  to  the  public  offer.    It  is  said  that  Mr.  A.  J. 
Nesbit,  of  the  Investment  Trust  Company,  had  been  ac- 
quiring Montreal  Steel  stock  quietly  for  more  than  a 
year.*    Shortly  after  this,  the  company  was  merged  with 
the  Ontario  Iron  and  Steel  Company  as  the  Canadian  Steel 
Foundries  with  a  capitalization  of  $8,050,000,  $3,000,000 
common,  $1,400,000   preferred,  and  $3,650,000  of  6  per 
cent  first-mortgage  and  collateral  trust  bonds.   The  capi- 
tal of  the  constituent  companies  had  been  $1,300,000  for 
the  Montreal  Steel  Works,  and  $500,000  for  the  Ontario 
Iron  and  Steel  Company.'   The  increase  in  the  capitali- 
zation was  supposed  to  be  based  on  future  earnings  after 
a  new  plant  should  be  built  at  Longue  Voint  with  the  pro- 
ceeds of  a  bond  issue.* 

Durmg  the  same  p  nod  the  Canadian  Car  and  Foundry 
Company  had  been  formed  to  unite  the  Canada  Car  Com- 
pany, the  Dominion  Car  and  Fomidiy  Company,  and  the 
Rhodes  Curry  Car  and  Foundry  Company.  While  this  is 
not  primarily  an  iron  and  steel  company,  the  promoters 
urged  that  the  acquisition  of  the  Montreal  Steel  Works 
would  be  valuable  because  the  steel  plant  would  supply  the 
car  company,  which  had  been  for  some  time  one  of  the 
largest  customers  of  the  Montreal  Steel  Works ;»  and  also 
because  the  latter  had  installed  a  special  plant  to  produce 
the  steel  required  by  the  car  companies.'  Incidentally,  it 
may  be  noted  that  the  Rhodes  Curry  Company  had  an 
iron  foundry  at  Amherst,  Nova  Scotia,  which  could  supply 
the  Maritime  market.  To  acquire  control  of  the  Canadian 
Steel  Foundries,  the  Canada  Car  and  Foundry  Company 
issued  $100,000  additional  preferred  stock  and  $375,000  of 

*  Monetary  Times,  vol.  xlvi,  p.  217. 

'  Industrial  Canada,  vol.  v,  p.  629. 

»  Ibid.,  vol.  XLV.  p.  2726.  *  Ibid.,  vol.  l,  p.  80. 

«  McCuaig's  Circular,  April  5,  1911. 

«  Monetary  Times,  vol.  xlv,  p.  2726. 


THE  COMBINATION  MOVEMENT 


871 


common  stock,  purchased  most  of  the  stock,  and  guaran- 
teed the  interest  on  the  bonds  of  the  newly  formed  found- 
ries company.  The  whole  arrangement  seems  to  have  been 
of  mutual  advantage,  since  a  large  part  of  the  product  of 
the  foundries  could  be  used  by  the  car  company,  while  the 
earning  power  of  the  subsidiary  comjmny  was  supposed  to 
be  increased  by  the  manufacture  of  certain  railway  special- 
tics,  the  patents  for  which  were  owned  by  the  Canadian 
Car  and  Foundry  Company. ^  Since  the  formation  of  th:^ 
consolidation  the  company  has  built  new  plants  at  Am- 
herst, Nova  Scotia,  Longue  Point,  Quebec,  and  at  Fort 
William,  Ontario,  and  in  1912  tlie  plant  of  the  Pratt  and 
Letchworth  Company  of  Brantford,  which  manufactures 
malleable  iron  castings,  was  acquired  througli  the  control 
of  all  the  stock  by  the  Canada  Car  and  Foundry  Company. 
Thtis,  the  Canada  Car  and  Foundry  Company,  producing 
about  85  per  cent  of  the  car-building  capacity  of  Canada, 
seems  in  an  especially  strong  position  with  its  assured  sup- 
ply of  semi-finished  materials. 


•I 

i 

•1 


§  9.  On  various  occasions  American  capitalists  have  been 
charged  with  trying  to  comer  all  Canadian  ores  and  the 
Canadian  market  in  finished  products.  The  Texada  Is- 
land deposit  in  British  Columbia  has  been  supplying  an 
American  furnace.  The  Moose  Mountain  ore,  partly  owned 
by  American  capitalists,  is  being  shipped  to  the  United 
States.  It  is  said  that  ores  near  Port  Arthur  were  pur- 
chased in  1901  by  the  United  States  Steel  Corporation.' 
The  Oliver  Iron  Mining  Company  was  at  work  in  the  Ati- 
kokan  Range  in  1906,  collecting  information  on  ores  in  all 
directions.'  In  1912  the  report  was  current  that  an  iron 
ore  deposit  near  Calgary,  Alberta,  was  controlled  by  the 
United  States  Steel  Corporation.*  This  corporation  is  sup- 

'  McCuaig's  Circi'lar.  April  5,  1911. 

•  Monetary  Times,  vol.  xxxiv,  p.  l.'!ll. 

'  Iron  Age,  vol.  lxxviii,  p.  491.        *  Globe,  January,  1912. 


V'ij. 


m    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

posed  to  be  holding  Canadian  ores  in  reserve  lest  tliey  fall 
into  the  hands  of  comy>etitors.' 

Through  the  American  Steel  and  Wire  Company,  the 
United  States  Steel  Corporation  is  supposed  to  have  ct)n- 
trolled  the  Canadian  market  in  certain  articles,  not  only 
through  the  ownership  of  a  fencing  wire  and  fence  plant  at 
Hamilton,  Ontario,''  but  by  certain  agreements  with  the 
Canadian    Hardware    Association.     The   wire    manufac- 
turers were  forced  not  to  sell  direct  to  the  wholesale  hard- 
ware dealers  of  Canada.'  When  the  operation  of  the  Domin- 
ion Iron  and  Steel  Company's  rod  mill  broke  down  this 
arrangement,  agreement  >  were  made  with  the  Canadian 
Hardware  Association,  requiring  their  members  to  buy 
barbed  wire  from  the  Steel  Corporation,  which,  in  turn, 
guaranteed  a  10  per  cent  profit  to  the  jobbers,  and  handled 
the  trade  in  an  entirely  satisfactory  manner.  Although  the 
price  charged  was  one  at  which  English  firms  could  do 
business,  yet  no  jobber  would  buy  in  England;  for  an  at- 
tempt to  do  so  would  have  resulted  in  a  serious  reprisal  and 
the  refusal  of  the  Steel  Trust  to  sell  barbed  wire  to  such 
firms.  As  English  manufacturers  could  not  supply  all  the 
demand,  the  United  States  Steel  Corporation  has  had  a 
strong  weapon.*   It  is  relevant  to  note  that  apparently  no 
firms  produce  barbed  wire  in  Canada  at  the  present  time, 
whereas  several  produced  such  products  some  ten  years 
ago. 

In  1906  control  of  the  Dominion  Wire  Manufacturing 
Company  of  Montreal  was  secured  by  Mr.  J.  J.  Farrell,  a 
direct(  ^r  of  the  United  States  Steel  Corporation;  but  in  1910 
control  was  transferred  to  the  Steel  Company  of  Canada." 

More  recently  the  United  States  Steel  Corporation  has 
decided  to  buUd  a  plant  at  Sandwich,  Ontario.   It  has 

*  Jeans,  op.  cit.,  p.  120.       «  Iron  Age,  vol.  Lxxxiii,  p.  1380. 
'  Ibid.,  vol.  Lxxin,  April  14,  p.  SI. 

*  Ibid.,  vol.  Lxxiv,  August  11,  p.  12. 

*  Hardware  and  Metal,  vol.  xvni,  February  17.  p.  80. 


THE  COMBINATION  MOVEMENT 


27S 


been  suggested  that  this  move  "nil  result  in  the  combination 
of  Canadian  firms  with  the  United  States  hteel  Trust. 
Whether  the  Steel  Trust  will  be  able  to  force  down  prices 
in  Canada,  or  whelLer  it  will  secure  control  of  Canadian 
firms,  only  the  future  can  determine. 


§  10.  Considerable  discussion  has  centered  in  the  pos- 
sibilities of  further  merging  of  the  Canadian  if  m  and  steel 
interests  and  of  the  possiule  present  interrelations  of  exist- 
ing companies.  In  100.  a  rumor  was  abroad  that  Mr. 
Morgan  had  bought  the  Sydney  Works  for  over  $50,000,- 
000,  but  Mr.  Clergue  and  Mr.  Whitney  published  state- 
ments that  the  Canadian  irdiotries  would  maintain  in- 
dependence, and  that  the  United  States  Steel  Corporation 
was  too  heavily  capitalized  to  give  troublesome  competi- 
tion.' In  1903  it  was  said  that  Mr.  Clergue  was  a  director 
of  the  Canada  Iron  Furnace  Company,'  and  in  1905  the 
Lake  Suf>erior  Company  was  reputed  to  be  holding  an 
interest  in  the  blast  furnace  at  Midland.' 

Once  the  Canada  Iron  Corporation,  the  Dominion  Steel 
Corporation,  and  the  Steel  Company  of  Canada  "yere 
formed,  further  developments  were  expected.  When  inter- 
ests connected  with  both  the  Dominion  Steel  Corporatior 
and  the  Steel  Company  of  Canada  met  in  Montreal  in 
June,  1900,  to  confer  on  the  question  of  a  possibl*;  t.\)n)'''ict 
in  the  choice  of  names  of  the  companies.*  the  rep«  H  was 
circulated  that  negotiations  were  pendl*  '  *or  a  me  ^r./  of 
the  two  companies.'  The  presence  of  three  gentlemen  con- 
nected with  these  companies  in  England  in  August  of  1910 
was  seized  upon  as  further  evidence  of  a  forthcoming 
merger.*  Moreover,  Mr.  William  McMaster  was  a  director 

>  Morang's  Register,  1901,  pp.  9S-95. 

•  Iron  Age,  vol.  lxvi,  December  27,  p.  17. 

•  Iron  Trade  Review,  vol.  xxxviii,  February  2,  p.  66. 

•  Monetary  Times,  vol.  xliv,  p.  2412. 

•  Commercial  and  Financial  Chronide,  vol.  xc,  p.  1556. 

•  Ibid.,  vol.  xiJV,  p.  429. 


t  : 


J-   '■ 


^  'i « 


m- 


m 


274    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

of  both  the  Dominion  Steel  Corporation  and  the  Montreal 
Roiling  Mills,'  which  purchased  largely  from  the  Domin- 
ion Iron  and  Steel  Company.^  The  Ontario  Tack  Com- 
pany 3  and  the  Dominion  Wire  Manufacturing  Company  * 
had  also  been  customer-  of  the  Dominion  Iron  and  Steel 
Company.  When  the  Steel  Company  of  Canada  decided 
to  build  wire-rod  mUls  of  its  own  to  supply  its  own  plants, 
the  Dominion  Stc^l  Corporation  announced  that  it  would 
erect  its  own  wire  and  nail  mills  as  a  customer  to  take  the 
place  of  those  it  was  losing.^  But  shortly  a  report  was  issued 
that  the  Steel  Company  of  Canada  would  not  build  wire- 
rod  mills  and  that  the  Dominion  Steel  Corporation  would 
not  build  ^-ire  nail  or  screw  works.^  In  spite  of  this,  both 
companies  have  foUowed  the  original  plans  and  have  buUt 
mills  for  the  production  of  intermediate  products  and  fin- 
ished products  respectively. 

A  fight  for  the  control  of  the  Nova  Scotia  Steel  and  Coal 
Company  aroused  a  similar  discussion  in  1910  and  1911, 
At  the  end  of  1909  a  stock  bonus  of  20  per  cent  was  given 
to  the  stockholders,  and  a  dividend  was  declared.  That  an 
imusual  influence  was  at  work  was  soon  evident.  "Scotia" 
became  one  of  the  most  prominent  stocks  in  the  daily  list 
of  sales.  It  was  said  that  a  syndicate,  including  Mr. 
Rodolphe  Forget,  actually  had  control  of  the  company, 
but  that  at  the  last  moment  a  slip  was  made  and  the  previ- 
ous control  was  returned  to  power.  A  peaceful  solution  was 
reached  through  the  purchase  of  the  Forget  interests  by 
Mr.  Harris,  the  president.^  Some  believed  that  Mr.  Forget 
wished  to  make  "Scotia"  the  basis  of  a  large  Canadian 
steel  and  coal  merger,*  but  little  attention  was  paid  to  this 

»  Commercial  and  Financial  Chronicle,  vol.  xlv  p  48 

!  ^^»«f  «'J/  Times  vol.  XLV,  p.  48.       »  Iron  Age.  voI.'lxxv.  p.  221. 

Hardware  and  Metal,  vol.  xxii,  June  H,  p.  38. 
*  Monetary  Timc.i.  vol.  XLiv,  p.  2.514. 
'  Hardware  and  Metal,  vol.  xxii,  June  25,  p.  42. 
'  Monetary  Times,  vol.  xlv,  p.  424. 
'  Glebe,  March  10,  p.  10. 


^iHRwssw^rr^B^ 


THE  COMBINATION  MOVEMENT 


275 


rumor  which  was  generally  regarded  as  premature.'  Yet 
"  the  industrial  tendency  of  the  day  is  toward  such  com- 
bination. With  increasing  competition  and  a  growing 
market,  a  consolidation  is  not  unlikely."^  "The  present 
tendency  will  not  be  stayed.  Before  many  years  we  may 
have  a  great  steel  company  controlling  the  Canadian 
market  and  wielding  considerable  power  and  fostering  an 
export  trade.  The  diflBculties  in  the  way  of  amalgamation 
are  being  overcome  by  the  merger  of  five  companies  in  the 
Steel  Company  of  Canada.  The  steel-coal  merger  was  a 
side-step,  but  not  backward."  '  Such  was  the  comment  of 
the  Monetary  Times.* 


§  11.  The  causes  and  character  of  this  combination 
movement  are  not  easily  described.    Most  of  the  amal- 

*  Monetary  Times,  vol.  xlv,  p.  524.  '  Ibid.,  p.  911. 
'  Ibid.,  vol.  xuv,  p.  2412. 

*  Other  mergers  have  been  organized  from  time  to  time.  In  1910  the 
Canadian  Machinery  Corporation  was  formed  to  include  the  MacGregor, 
Gourlay  and  Company  of  Gait,  G.  Ballantyne  and  Company  of  Preston, 
the  Hespeler  Machinery  Company,  the  Goliiie  and  McCuUock  Company 
of  Gait,  and  the  Sussex  Manufacturing  Company  of  New  Brunswick, 
practically  all  the  firms  in  Canada  manufacturing  woodworking  ma- 
chinery and  tools.  The  Smith's  Falls  Malleable  Castings  Company,  the 
McKinnon  Dash  and  Metal  Company  of  St.  Catharines,  and  other  com- 
panies in  Brantford  and  Walkerville,  manufacturing  malleable  castings 
for  railroads,  agricultural  implements,  and  automobiles,  were  merged  in 
1910.  In  the  same  year  the  Expanded  Metal  Company,  the  King  Radia- 
tor Company,  the  Dominion  Radiator  Company,  and  Taylor-Forbes 
Company,  all  the  firms  in  this  line  of  business  in  Canada,  were  consoli- 
dated as  the  Steel  and  Radiation  Company  with  a  capital  of  $5,000,000. 
In  1912  the  Metal  Sheeting  and  Siding  Company  absorbed  the  A.  B. 
Ormsby  Company,  raising  the  capitalization  from  $700,000  to  $1,500,- 
000.  The  Canada  Foundries  and  Forgings  C(  mpany  was  capitalized  at 
$3,000,000  to  take  over  the  Canadian  Billings  and  Spencer,  Ltd.,  the 
James  Smart  Manufacturing  Company,  Ltd.,  and  the  Canada  Forge, 
Ltd.  In  1884  the  Gananoqut  Spring  and  Axle  Company  was  formed  to 
consolidate  the  Gananoque  Spring  Company  and  the  Byers  Manufac- 
turing Company,  manufacturers  of  axles  at  Gananoque.  In  1890  the 
properties  of  the  Dowsley  Spring  and  Axel  Company  of  Chatham,  On- 
tario, were  purchased.  In  1913  the  Ontario  Steel  Products  Company  was 
formed  to  acqiiire  the  properties  of  the  Gananoque  Spring  and  Axle  Com- 
pany and  the  D.  F.  Jones  Manufacturing  Company  of  Gananoque. 


Ml 


ns^^^^^^^^s 


f.,^-'    :."-«; V^  . 


i»    -Y-r  -.'■N4-T*  .^.'-ft-w-r  - 


i 


276    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

gamations  are  so  recent  that  the  effect  of  combination  on 
earnings  cannot  possibly  be  separated  from  the  effects  of 
other  influences.  It  is  very  difficult  to  gain  any  idea  of  the 
earning  power  of  the  corporations  for  two  or  three  years 
at  the  least.  It  may  be  said  that  there  is  little  evidence  of 
a  decrease  of  working  expenses,  especially  as  larger  salaries 
have  been  found  necessary  or  desirable  for  men  capable  of 
taking  charge  of  the  combinations. '  It  is  a  noteworthy  fact 
that  most  of  the  combinations  have  consolidated  plants 
manufacturing  different  kinds  of  products.  Companies 
producing  finished  articles  have  secured  control  of  raw 
materials  such  as  coal,  ore,  and  limestone,  or  intermediate 
products  such  as  wire  rods,  steel  castings,  and  pig  iron.  In 
other  cases  a  market  for  pig  iron  or  steel  has  been  assured 
by  such  mergers  as  the  Steel  Company  of  Canada.  In  the 
case  of  the  Nova  Scotia  Steel  and  Coal  Company  and 
the  Canada  Iron  Corporation,  allied  or  identical  interests 
have  been  simply  consolidated  under  one  organization  and 
management. 

The  forms  of  consolidation  have  been  varied.  The  lease 
of  the  plant  with  a  guaranty  of  interest  on  bonds  and  divi- 
dends on  stocks  has  been  used  by  the  Dominion  Steel  Cor- 
poration, and  a  guaranty  of  interest  and  dividends  was  the 
method  used  in  connection  with  the  control  of  the  Cana- 
dian Steel  Foundries  by  the  Canada  Car  and  Foundry 
Company.  Informal  "gentlemen's  agreements"  may  or 
may  not  have  existed.  Factor  agreements  were  used  by 
the  United  States  Steel  Corporation  to  control  some  lines 
of  the  hardware  trade.  Contracts  between  certain  firms 
might  even  be  regarded  as  a  form  of  consolidation.  It  is 
said  that  at  times  the  marketing  of  such  products  as  steel 
rails  has  been  controlled  by  one  firm,  Drummond,  Mc- 
Call  and  Company  of  Montreal,^  as  the  selling  bureau. 
Of  late,  the  holding  company  seems  to  be  the  more  popular 

'  Financial  Post,  October  22,  1910,  p.  2. 
*  Industrial  Canada,  vn!.  v,  p.  380, 


THE  COMBINATION  MOVEMENT 


877 


form,  as  in  the  case  of  the  Douiinion  Steel  Corporation,  the 
Lake  Superior  Corporation,  and  the  Canada  Car  and 
Foundry  Company.  Usually,  however,  the  plants  have 
been  purchased  outright  and  the  previous  stockholders 
receive  bonds  and  stocks,  part  of  which  may  be  a  bonus 
for  their  previous  ownership  or  holdings.  The  exbtence  of 
interlocking  directorates  cannot  be  denied. 

Various  causes  or  reasons  for  consolidation  have  been 
set  forth.  The  assurance  of  a  market  for  raw  or  intermedi- 
ate materials,  the  saving  of  wastes  of  competition  in  the 
form  of  excessive  costs  of  marketing,  selling  and  delivery, 
the  specialization  of  plants,  and  the  repression  of  labor 
unions  have  seemed  desirable  ends;  but  there  is  little  evi- 
dence that  much  has  been  accomplished.  It  is  true  that 
the  Dominion  Steel  Corporation  ended  a  strike  that  prob- 
ably would  have  been  ended  in  some  other  way.  The  ac- 
quisition of  sources  of  raw  materials  or  an  outlet  for  such 
raw  an('  intermediate  materials  seems  to  be  the  most  valu- 
able industrial  feature  of  consolidation. 

Charges  have  been  made  that  one  other  cause  of  con- 
solidation has  been  the  promotion  activities  of  a  few  Cana- 
dian financiers.  No  doubt  the  promoters  have  not  gone 
unrewarded.  A  table  of  the  securities  issued  by  the  con- 
stituent and  the  amalgamated  companies  reveals  some 
interesting  facts. 

The  increase  of  actual  capitalization,  including  bonds, 
amounts  to  about  $27,000,000,  of  which  $24,000,000  was 
produced  in  connection  with  companies  consolidated  by 
Sir  Max  Aitken;  namely,  the  Canada  Car  and  Foundry 
Company  and  the  Canadian  Steel  Foundries,  and  the 
Steel  Company  of  Canada.  As  the  capitalization  of  the 
constituent  companies  of  the  Dominion  Steel  Corporation' 
is  some  $23,000,000  greater  than  that  of  the  holding  com- 


^i 


'  The  overcapitalization  of  the  Dominion  Iron  and  Steel  Company  be- 
fore it  was  combined  with  the  Domiuion  Goal  Company  was  probably 
nearly  $12,000,000. 


m-imimi 


878    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

Table  of  Securities  issued 

|c«pi 

Company 


Cui(U  Bolt  and 
Nut 

Canada  Machinery 
Corporation 

Canadian  Car  and 
Foundry  Co 

Canadian'Steel  Cor- 
poration  

Dominion  iSteel 
Corporation 

Steel  Company  of 
Canada 

Steel  and  Radia- 
tion  

Canada    Foundriea 

«•?''■  f?''!'''?*' 

Metal  Sheeting  and 
SldincCo 


pany,  the  increase  of  cat^italization  of  the  other  iron  and 
steel  companies  seems  to  have  been  even  greater  than  ap- 
pears on  the  surface 

§  12.  Besides  the  obvio  is  mergers  and  combinations  of 
firms,  some  community  o.  interest  between  corporations 
seems  to  have  existed  from  time  to  time.  Several  of  the 
mterrelationships»  have  already  been  noted  in  cases  where 
the  corporations  have  since  been  united,  as  in  th>;  case  of 
tlie  Dominion  Steel  Corporation,  the  Steel  Company  of 
Canada,  and  the  Canada  Iron  Comoration. 

In  1899  $6,000,000  of  bonds  were  issued  ^  along  with 
$5,000,000  of  7  per  cent  cumulative  preferred  stock  on 
which  dividends  were  payable  during  the  period  of  develop- 
ment.»  Underwriters  secured  the  bonds  at  90,  and  each 
$500  bond  carried  the  right  of  subscription  to  fifteen  shares 
of  stock  at  $15  per  share.*  An  option  of  $80  oer  share  on 
$2,000,000  of  the  preferred  stock  was  reported."*  There  was 

'  See  Appendix  I. 

»  Commercial  and  Financial  Chronicle,  vol.  lxix,  p.  553. 

'  Monetary  Ti,.ies,  vol.  xxxiv,  p.  88C. 

*  Commercial  and  Financial  Chronicle,  vol.  lxxi  p  lH 

'  Ibid.,  vol.  Lxxii,  p.  778. 


THE  COMBINATION  MOV^EMENT 


279 


undoubtedly  an  initial  overcapitalization  of  from  $7,000- 
000,  to  $8,000,000,  omitting  discounts  on  bonds  and  pre- 
ferred stock.  The  $10,000,000  of  common  stock  T-ust  have 
sold  for  about  $1,500,000.  The  bonds  were  discoun^ed  for 
about  $600,000.  The  preferred  stock  was  sold  at  about  20 
below  par,  a  loss  of  about  $1,000,000.  In  1901  $5,000,00' 
more  of  common  stock  was  issued  at  60,  involving  a  fiuther 
overcapitalization  of  about  $1,750,000.  ^  As  no  depreciation 
account  was  provided  until  1907  to  1908,  the  situation  \^ 
further  aggravated.  The  increase  i  value  of  the  Bell  Island 
ore  deposits  is  the  only  factor  redeeming  an  over-capitaliza- 
tion that  might  be  estimated  as  hijrh  as  $11,850,000.  Mr. 
William  McMaster,  Hon.  H.  Montague  Allen,  and  Hon. 
Robert  MacKay  were  members  of  the  board  of  directors 
of  the  Montreal  Rolling  Mills,  previous  to  its  consolida- 
tion in  the  Steel  Company  of  Canada.'^  Mr.  McMaster  is 
now  a  director  of  the  Steel  Company  of  Canada.  Mr. 
T.  J.  Drummond,  of  the  Canada  Iron  Corporation,  who 
was  a  director  of  the  Lake  Superior  Corporation  after  its 
reorganization  in  1905,  became  president  in  1908.'  Mr. 
H.  R.  Drummond,  Mr.  G.  E.  Drummond,  and  Mr.  Edgar 
McDougall  were  on  the  board  of  directors  of  the  Cumber- 
land Coal  and  Railway  Company,  prior  to  its  absorption 
by  the  Dominion  Steel  Corporation.*  In  1910  Mr.  J.  Ti. 
Wilson,  of  the  Dominion  Coal  Company  and  Dominion 
Steel  Corporation,  was  added  to  the  directorate  of  the 
Nova  Scotia  Steel  Company,  together  with  Mr.  K.  W. 
Blackwell,  of  the  Montreal  Steel  W^orks.  Mr.  Blackwell 
was  supposed  to  be  interested  also  in  the  Dominion  Steel 
Corporation.* 

A  general  survey  of  the  1912  directorates  of  iron  and 
steel,  railway  and  banking  companies  reveals  the  following 

»  Ibid.,  vol.  Lxxiv,  p.  530. 

2  Canadian  Engineer,  vol.  10,  p.  S4p. 

•  Canada,  ReporU  on  Mining  end  Metallurgical  Induetries,  p.  324. 

*  Ibid.,  p.  3G3.  '  Moneirrj  Timr^,  vol,  xi.v,  p.  filS. 


i 


w 


m 


280    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

facts:  Mr.  T.  J.  Drummond '  was  president  of  the  Canada 
Iron  Corporation  and  of  the  Lake  Superior  Corporation 
and  was  on  the  board  of  directors  of  the  Cockschutt  Plow 
Company  and  one  hank.    Mr.  G.  E.  Drummond  was  on 
the  boards  of  the  Canada  Iron  Corporation,  the  Canada 
Car  and  Foundry  Company,  the  Cockschutt  Plow  Com- 
pany, and  one  bank.  Mr.  H.  Cockschutt  was  on  the  boards 
of  the  Canada  Iron  Corporation,  and  was  President  of  the 
Cockschutt  Plow  Company.    Mr.  Robert  Hobson  was 
president  of  the  Steel  Company  of  Canada,  and  was  on  the 
boards  of  a  loan  company  and  tlie  Cockschutt  Plow  Com- 
pany. Mr.  C.  A.  Birge  and  Mr.  C.  S.  Willcox,  of  the  Steel 
Company  of  Canada,  were  also  members  of  boards  of  di- 
rectors of  banks.  Mr.  H.  S.  Hoit  was  on  the  boards  of  the 
Steel  Company  of  Canada,  the  Canada  Car  and  Foundry 
Company,  and  a  bank;  Hon.  William  Gibson,  of  the  same 
company,  had  a  place  on  the  directorate  of  a  bank  and  of 
a  loan  company.   Mr.  W.  D.  Matthews  was  a  member  of 
the  boards  of  the  Dominion  Steel  Corporation,  the  Steel 
Company  of  Canada,  a  bank,  a  loan  company,  a  naviga- 
tion company,  and  three  lallways.  Mr  J.  Hamilton  Benn 
was  the  London  representative  on  the  boards  of  the  Steel 
Company  of  Canada,  the  Canada  Iron  Corporation,  and 
the  Canada  Car  and  Foundry  Company.  Mr.  Tames  Red- 
mond was  on  the  boards  of  the  Canada  Car  and  Foundry 
Ccmpairy,  the  Canada  Locomotive  Company,  and  a  bank. 
Hon.  R.  JaflFray  was  a  director  of  the  Nova  Scotia  Steel 
and  Coal  Companj,  a  'oan  company,  one  bank,  and  a  rail- 
way. Sir  Max  Aitken,  the  promoter,  was  on  the  boards  of 
the  Steel  Company  of  Canada,  the  Canada  Iron  Corpora- 
tion, the  Canada  Car  and  Foundry  Company,  and  one 
railway.  Mr.  K.  W.  Blackwell  was  a  director  of  the  Nova 
Scotia  Steel  and  Coal  Company  and  the  Canadian  Steel 
Foundries.  Mr.  N.  Curry  was  president  of  Canadian  Steel 
Foundries  and  the  Canada  Car  and  Foundry  Company, 

*  Ill-health  has  caused  his  resignation  since  Idli. 


THE  COMBINATION  MOVEMENT 


281 


and  a  director  of  a  bank  and  of  a  coal  company.  Of  the 
directors  of  the  three  boards  of  the  Dominion  Coal  Com- 
pany, Mr.  J.  H.  Plummer  was  president  of  all  three,  and 
was  a  director  of  one  railway.  Sir  V.'illiam  Mackenzie  was 
on  one  bank  board,  one  railway  board,  and  w  as  president 
of  the  Atikokan  Iron  Company  and  a  director  of  Moose 
Mountain,  Ltd.  Sir  Henry  Pellatt  was  connected  with 
Steel  and  Radiation,  a  navigation  company,  and  a  railway 
company.  Mr.  J.  R.  Wilson  was  a  director  of  the  Canadian 
Steel  Foundries,  and  the  Canada  Car  and  Foundry  Com- 
pany. Mr.  H.  M.  Molaon,  Sir  H.  M.  Allan,  Mr.  George 
Caverhill,  Hon.  R.  Dandurand,  Hon.  R.  Mackay,  Mr. 
William  McMaster,  Sir  W.  E.  Van  Home,  Senator  Cox, 
Mr.  F.  NichoUs,  Mr.  E.  R.  Wood,  and  Colonel  James 
Mason  were  connected  with  banking  and  transportation 
companies. 


II 


§  13.  The  question  of  the  actual  power  of  industrial 
combination  in  Canada  is  answered  by  a  glance  at  the  list 
of  directors  cited  above  and  their  relations  to  various  com- 
panies, which  indicates  that  Ji  some  way  or  other  every 
company  of  any  importance  was  related  to  every  other. 
One  director,  Mr.  Blackwell,  of  the  Nova  Scotia  Steel  and 
Coal  Company,  which  seems  farthest  removed  from  the 
other  large  companies,  could  meet  on  the  board  of  the 
directors  of  the  Canada  Car  and  Foundry  Company,  and 
its  subsidiary  Canadian  Steel  Foundries,  directors  of  the 
Lake  Superior  Corporation,  the  Canada  Iron  Corporation, 
the  Steel  Company  of  Canada,  the  Dominion  Steel  Cor- 
poration, the  Canada  Locomotive  Company,  and  the  Cock- 
schutt  Plow  Company.  Furthermore,  Mr.  Blackwell  was 
interested  in  the  industrial  end  of  these  enterprises  and  his 
relation  to  each  was  no  formal  affair.  Yet  this  grouping  of 
directors  from  various  interests  in  this  company  may 
simply  indicate  an  attempt  to  insure  friendly  relations  be- 
tween that  and  the  larger  companies.  Certainly,  the  C'^na- 


M 


Si'! 


282    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

dian  iron  and  steel  industry  is  not  "dominated"  by  the 
Canadian  Car  and  Foundry  Company.  Often  directors  are 
chosen  merely  for  their  prominence  in  the  financial  inter- 
ests of  Canada,  The  interests  of  Sir  INIax  Aitken,  IVIr. 
Henry  S.  Holt.  Sir  Henry  Pellatt,  Mr.  W.  D.  Matthews,  and 
Sir  William  Mackenzie,  as  well  as  Mr.  J.  Hamilton  Benn, 
of  London,  England,  are  likewise  chiefly  financial.  Mr. 
T.  J.  Diumnioud's  relations  to  the  Lake  Superior  Corpora- 
tion, the  Canada  Iron  Corporation,  and  the  Canadian  Car 
and  Foundry  Comjjany  were  more  nearly  of  an  industrial 
character. 

It  is  not  to  be  understood  that  any  one  corporation, 
through  the  attachments  of  its  boards  of  directors,  con- 
trols all  the  other  companies.  The  most  one  can  say  is  that 
the  relations  are  intimate  enough  to  render  improbable 
any  severe  competition  between  the  various  companies. 

In  fact,  there  seems  to  be  little  room  for  competition. 
The  St,eel  Company  of  Canada  controls  nearly  all  the 
large  bolt  and  nut  and  screw  plants,  and  produces  over 
fifty  per  cent  of  the  nail  output.  The  Nova  Scotia  Steel 
and  Coal  Company  puts  on  the  market  a  class  of  articles 
produced  by  no  other  large  firm  in  Canada.  The  Canada 
Iron  Corporation  devotes  its  pig-iron  output  to  the  man- 
ufacture of  car  wheels  and  pipes,  of  which  it  has  almost  a 
natural  monopoly  because  of  the  character  of  the  pig  iron 
produced.  The  Canadian  Steel  Foundries  has  consolidated 
two  important  steel-ca-^tings  firms  whose  products  are  now 
used  by  the  Car  and  Foundry  Company.  The  Steel  and 
Radiation,  Ltd.,  competes  with  none  of  the  large  iron  and 
steel  companies;  it  simply  receives  raw  materials  for  use  in 
the  manufacture  of  its  own  special  line  of  products.  The 
Canada  Locomotive  Company  and  the  Cockschutt  Plow 
Company  are  highly  specialized  concerns.  The  Atikokan 
Iron  Company  caters  to  the  Western  trade,  and  Moose 
Mountain,  Ltd.,  ships  ores  to  the  United  States. 

The  various  large  iron  and  steel  companies  in  Canada 


THE  COMBINATION  MOVEMENT 


883 


are  each  devoted  to  the  manufacture  of  a  special  line  of 
product,  and,  therefore,  come  into  competition  with  only 
those  companies  or  firms  so  small  that  they  do  not  attract 
public  notice.  Competition  or  its  possibility  does  exist  in 
the  wire  and  nail  market  between  the  Dominion  Steel 
Corporation  and  the  Steel  Company  of  Canada,  as  well  as 
with  a  few  small  firms  which  are  able  to  secure  a  certain 
following  trade.  The  Dominion  Steel  Corporation  may 
compete  with  the  Lake  Superior  Corporation  in  the  rail 
market,  j  ad  there  might  be  competition  in  the  pig-iron  and 
steel-billet  market  were  it  not  that  the  companies  consume 
a  large  percentage  of  their  own  output.  The  United  States 
Steel  Corporation  completely  dominates  the  barbed-wire 
market  since  Canadian  production  has  disappeared.  Mal- 
leable castings  are  practically  monopolized  by  a  merger  of 
the  larger  companies. 

It  is  a  safe  conclusion  that  the  Canadian  iron  and  steel 
industry  is  rather  successfully  controlled  in  its  various 
branches  by  the  combinations  producing  such  lines  of  pro- 
ducts as  have  been  described  above.  While  there  may  be 
internal  competition  in  the  production  of  wire  rods,  wire, 
wire  nails,  and  rails,  it  is  never  so  serious  as  to  depress 
prices  unduly.    The  chief  competition  must,  therefore, 
come  from  the  United  States  Ste«:l  Corporation;  but  this 
competition  is  partially  checked  by  duties  and  the  dump-  / 
ing  clause.    In  a  few  cases  the  United  States  Steel  Cor-  I 
poration  has  been  able  to  dominate  completely  the  Cana- 1 
dian  market  at  its  own  prices;  for  instance,  in  barbed  wire  J 
and  at  times  in  wire  rods.   No  part  of  the  Canadian  iron 
and  steel  trade  is  in  serious  danger  of  destructive  competi^ 
tion. 

The  possibility  of  an  amalgamation  of  all  Canadian  iron 
and  steel  plants  offers  dangerous  ground  for  prophecy. 
There  is  always  the  possibility  that  the  principle  of  large- 
scale  production  and  of  integration  of  industry  may  shortly 
involve  the  various  firms  in  a  compelillou  necessitating 


m 


» ^i 


mm 


t . 


^l 


884    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

further  coasolidations.  The  competition  of  the  Dominion 
Steel  Corj)oration  and  the  Steel  Company  of  Canada  in  the 
hardware  trade  is  practically  assured  for  the  immediate 
future,  and  the  United  States  Steel  Corporation  plant  may 
strengthen  this  situation.  A  jwssible  amalgamation  would 
have  to  include  the  Canadian  branch  of  the  Steel  Corpora- 
tion. A  merger  programme  of  this  character  is  a  possibility, 
but  it  is  imi)ossihlc  to  predict  the  course  of  events.  The 
rapid  expansion  of  the  market  for  nearly  all  iron  and  steel 
products  indicates  that  there  is  no  immediate  necessity  for 
such  a  policy. 

§  14.  Custom  and  popular  feeling  attribute  the  trust 
movement  to  the  tariff  and  other  forms  of  protection. 
Since  this  supposed  relation  is  likely  to  be  much  discussed 
in  Canada  in  the  near  future,  it  is  important  to  consider 
the  relation  of  protection  to  the  trust  movement  in  Canada. 

The  earliest  combines  in  the  iron  and  steel  industry  in 
Canada  followed  overproduction  and  excessive  competi- 
tion m  the  early  nineties.   The  tariff,  together  with  the 
character  of  the  business,  overstimulated  the  hardware 
branch  of  the  industry.  At  the  same  time  the  tariff  gave 
the  Canadian  producers  a  reason  to  combine,  assisted  them 
to  combine  by  limiting  the  nu;„    ;r  of  competitors  to  the 
home  producers  alone,  and  permitted  them,  once  they  had 
combmed,  to  raise  prices  behind  the  tariff  wall.  Many  of 
these  firms  are  now  consolidated  in  the  Steel  Company  of 
Canada,  which  produces  finished  goods  that  are  protected 
uy  duties  varying  from  25  to  35  per  cent.  This  company 
produces  over  fifty  per  cent  of  the  Canadian  output  of 
nails;  small  manufacturers  have  an  output  of  about  thirty 
per  cent  of  the  Canadian  product;  and  the  Dominion  Steel 
Corporation,  with  its  ally,  the  J.  Pender  Company  of  St. 
John,  produces  the  rest.  As  it  is  generally  recognized,  how- 
ever, that  the  Dominion  Steel  Corporation  and  the  Steel 
Company  of  Canada  have  an  agreement  to  avoid  compeli- 


TIIE  COMBINATION  MOVEMENT 


285 


tion,  if  possible,  these  large  com  sanies  are  probably  getting 
the  full  b«iiefit  of  the  tariff. 

The  output  of  ateol  rails  receives  the  full  benefits  of  pro- 
ter'ion.  As  there  are  only  two  rail  mills,  which  ary  said  to 
market  their  pr  luct  through  a  common  selling  bureau, 
there  is  no  eifective  competition  between  Canadian  firms. 
Two  firms  could  easily  come  to  agreement  if  there  were 
danger  of  losing  the  value  of  the  tariff  through  competi- 
tion. 

To  the  extent  to  which  the  different  companies  specialize, 
they  are  in  a  position  to  get  the  full  benefit  of  the  tjiriflf. 
In  this  respect  the  Nova  Scotia  Steel  Company,  which 
produces  practically  all  the  large  forgings  made  in  Canada, 
seems  specially  favored. 

The  internal  arrangement  of  the  iron  and  steel  .schedule 
may  have  an  effect  on  the  intefration  movement  in  the 
Canadian  iron  and  steel  industry.  What  is  the  probability 
that  a  Canadian  firm  would  undertake  to  produce  steel 
rails  without  an  eflBcient  blast-furnace  plant  and  steel  fur- 
naces? Obviously,  while  the  duties  on  pig  iron  and  on 
steel  billets  would  put  the  independent  companies  at  a 
disadvantage,  the  pig  iron  and  billet  departments  of  the 
Algoma  Steel  Corporation  and  the  Dominion  Steel  Cor- 
poration would  gain  what  their  rail  mills  would  lose  from 
nominally  increased  prices  of  pig  iron  and  billets.  Any 
firm  that  did  undertake  such  a  scheme  would  shortly  be 
forced  to  join  forces  with  one  or  both  of  the  mills  previously 
in  operation. 

In  the  same  way  an  advance  of  duties  on  pig  iron  and 
steel  billets  might  also  tend  to  push  the  movement  for 
integration  still  further  into  all  branches  of  the  finishing 
industry,  especially  into  lines  in  which  the  large  companies 
with  blast  furnaces  and  steel  furnaces  alieady  have  a  large 
output.  Although  integration  of  industry  may  have  in- 
duistrial  advantages,  the  tariff,  by  increasing  the  cost  of  the 
raw  materials  of  independent  firms,  would  drive  them  off 


Hi 

fli: 


S80    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

the  margin  of  profitable  production  and  restrict  competi- 
tion. 

This  principle  may  be  illustrated  by  the  probable  effects 
of  the  recent  increase  of  duties  on  wire  rods.  It  seems 
strange  that  the  Dominion  Steel  Corporation  and  the  Steel 
Company  of  Canada  should  neeil  duties  on  wire  rods  when 
the  large  part  of  their  output  is  turned  into  highly  pro- 
tected finislied  i)roducts  in  their  own  mills.  The  price  of 
these  finished  products  need  not  be,  and  in  all  probability 
will  not  be,  higher  than  before,  since  the  duties  on  these 
have  not  l)een  increased.  There  is  obviously  no  advantage 
to  these  companies  in  having  their  rod  mills  charge  up 
their  respective  nail  factories  with  higher  prices  for  rods. 
The  only  apparent  advantage  in  the  duties  is  the  possibil- 
ity of  raising  the  prices  of  rods  to  outside  nail  firms.  If  the 
rod  mills  succeed  in  so  doing,  the  independent  firms  may  be 
forced  out  of  business  and  the  two  large  companies  could 
then  get  the  full  advantage  of  the  tariff  on  finished  products 
and  on  the  raw  material  (rods)  as  well.  Facing  failure 
through  higher  costs  of  production,  the  independent  firms 
may  l-e  glad  to  sell  out  to  the  larger  companies. 

During  revision  of  the  iron  and  steel  schedule  this  point 
should  be  kept  dearly  in  mind.  Integration  will  no  doubt 
continue  to  spread  in  Canadian  industry,  but  it  would  be 
well  that  it  should  be  based  on  industrial  efficiency  rather 
than  on  artificial  tariff  barriers  on  raw  materials  which 
force  the  smaller  firms  out  of  business  and  restrict  the 
field  of  competition. 


CHAPTER  XI 

THE  CATTSES  OF  RECENT  PROGRESS 

§  1   Not  only  is  the  iron  and  steel  industry  the  modern 
b       'letcr  of  trade,  but  its  oevelopment  reflects,  probably 
more  than  that  of  any  other  indutry.  the  influen«;  of  a 
network  of  industrial  and  economie  factors.  The  influence 
of  these  in  early  periods  we  have  already  considered.  Par- 
ticular care  has  been  taken  in  considering  the  effect  of  pro- 
tection because  it  has  been  the  subject  of  so  much  public 
discussion.  Certain  phases  of  the  protective  policy  m  tiie 
last  two  decades  have  been  discussed  so  far  as  was  possible, 
before  outlining  the  growth  of  the  industry.  It  is  the  pur- 
pose of  this  chapter,  first  to  consider  other  causes  of  the 
recent  progress,  and  then  to  estimate  the  influence  of  pro- 
tection on  the  development  of  the  industry  in  recent  years. 
A  final  chapter  will  be  devote  to  considering  whether  or 
not  the  protective  policy  has  been  a  wise  one.  especially 
during  the  last  period  of  Canadian  industrial  history,  and 
whether  or  not  it  should  be  retained  or  how  it  should  be 
modified  as  the  programme  of  the  future. 

§  2  In  the  development  of  any  industry  the  availabiUty 
of  raw  materials  is  of  primary  importance,  and  in  Canada 
this  has  been  the  most  favorable  condition.  Nova  bcotia 
has  been  able  -o  develop  an  ircn  industry  because  of  the 
unlimited  supply  of  iron  ore  of  satisfactory  quality,  and 
an  unlimited  supply  of  coal  at  points  tc  which  the  ore  can 
be  cheaply  carried.  Though  the  f  mmaces  at  Bndgeville  and 
at  Ferrona  have  been  abandoned  on  account  of  lack  ol 
ores,  the  Nova  Scotia  Steel  aud  Coal  Company  has  ex- 
panded its  operations  by  building  at  Sydney  Mmes  a  blast 


;  it!? 


288    THE  CANADL\N  IRON  AND  STEEL  INDUSTRY 

furnace  to  use  coal  from  areas  purchased  in  1900,  and 
Wabana  ore  previously  used  at  Ferrona,  but  more  con- 
veniently shipped  to  the  coal  areas  at  Sydney  Mines.  Like- 
wise, the  Sydney  establishment  has  been  made  possible  by 
the  existence  of  the  Ne^-foundland  ore  supplies  and  the 
Glace  Bay  coal  areas,  conditions  which,  as  we  have  seen, 
would  have  assured  the  building  of  an  important  iron  and 
steel  plant  whether  or  not  the  bounties  had  been  renewed 

in  1899.  ,     ,.,       . 

Furnaces  were  buUt  at  Sa'ilt  Ste.  :Mane  under  like  cir- 
cumstances. The  discovery  of  the  Helen  Mine  inspired  the 
addition  of  a  new  department  to  the  "Soo"  industries. 
Unfortunately  the  ore  did  not  turn  out  to  be  of  Bessemer 
quality,  but  the  industry,  once  begun,  was  carried  on  to 
success  by  using  American  ore  secured  in  the  Lake  Superior 
region.    More  recently,  since  basic  open-hearth  furnaces 
have  been  installed,  it  has  been  decided  that  the  Helen 
Mine  ore  is  too  valuable  to  sell  to  outsiders.  The  Atikokan 
Iron  Company  was  incorporated  after  the  discovery  of 
ores  west  of  Port  Arthur,  and  the  Midland  Furnace  was 
built  in  1899  to  use  Helen  Mine  and  other  Ontario  ores. 
The  industry  of  Quebec  is  based  on  bog  ores  that  produce 
iron  of  very  superior  quality,  and  what  little  success  the 
Londonderry  plant  has  had  was  based  on  the  mixture  of  a 
number  of  Canadian  ores.  The  availability  of  foreign  ores 
and  the  admission  of  iron  ore  free  of  duty  has  been  of  great 
advantage  to  the  primary  industry  in  Canada.   Notwnth- 
standing  the  difference  in  the  bounties  on  iron  made  from 
native  ore  and  iron  made  from  foreign  ore,  the  annual  out- 
put of  iron  made  from  native  ore  has  amounted  to  only 
62,000  tons  in  1894,  20,000  tons  in  1898,  130,000  tons  in 
1910,  and  53,000  tons  in  1911,  while  the  production  of  iron 
made  from  foreign  ore  has  steadily  increased  from  nothing 
in  1894  to  about  600,000  tons  in  1910.  There  is  some  evi- 
dence that  Canadian  ore  will  be  used  more  extensively  m 
the  near  future,  especially  in  Ontario,  where  ores  are  most 


THE  CAUSES  OF  RECENT  PROGRESS        289 

accessible.  In  the  past  there  has  been '  a  considerable  ex- 
portation of  Canadian  ores,  amoiinting  to  more  than  the 
quantity  of  native  ores  charged  to  th.  furnaces  between 
1902  and  1907,  but  in  recent  years  the  tendency  to  export 
Canadian  ores  is  diminishing.  While  about  half  of  the 
foreign  ^  ores  used  have  come  from  the  Lake  Superior 
regions  and  half  from  Newfoundland,  the  rapid  growth  of 
the  Ontario  industry-  of  recent  years  puts  r  oremium  on  the 
use  of  American  ores. 

It  is  a  safe  conclusion  that  the  Canadian  industry  would 
not  have  been  an  important  one,  had  it  not  been  for  the 
discovery  of  the  Michipicoten,  and  especially  the  Wabana, 
ores,  as  well  as  the  availability  of  American  ores. 

Related  to  this  condition  of  development  was  the  great 
supply  of  coal,  especially  in  Cape  Breton,  which  supplies 
about  half  of  the  coke  charged  to  the  furnaces."  The  de- 
sirability of  securing  new  markets  for  the  output  of  the 
coal  of  the  Cape  Breton  areas  was  a  reason  for  beginning 
the  Sydney  industry.  The  importance  of  this  supply  of 
fuel  is  revealed  by  the  facts  that  in  1900  the  Nova  Scotia 
Steel  Company  purchased  the  coal  areas  of  the  General 
Mining  Association,  and  that  since  1909  the  Dominion  Iron 
and  Steel  Company  has  secured  control  of  the  Dominion 
Coal  Company  and  the  Cumberland  Coal  and  Railway 

Company.  ^u    tit    • 

Ontario  is  situated  somewhat  differently  from  the  Man- 
time  Provinces,  and  is  practically  dependent  on  imported 
coal  or  imported  coke.  Little  or  no  coal  finds  its  way  from 
Nova  Scotia  to  Ontario  for  smelting  purposes.  Ontano  has 


From  the  United  States 
(tool) 


>  See  Appendix  G,  and  Appendix  B,  Table  IV 
»  The  amount  of  Newfoundland  and  of  American  ore  used:  — 
:»lend»i  year  From  Ncwf mindland 

1010  fi«-'5."7  681.918 

1011  779.«8«  849.086 
Igla              956.469              1.05^.690 

»  See  Appendix  B,  Table  IV. 


C'  i 

til 


V'i:1?^ 


'^^!. 


A 


:e 


11^ 


I*   < 

It 


290    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

been  dependent  on  the  United  States.  This  scarcity  of  fuel 
which  the  Ontario  industry  had  to  face  in  early  years  has 
made  possible  the  carrying  of  coal  to  plants  which  are 
located  in  a  large  and  growing  market  area  in  Ontario. 
Coal  and  coke  can  be  brought  from  Pennsylvania,  Ohio, 
or  W?st  Virginia  to  Canadian  ports  on  the  Great  Lakes  al- 
most as  cheaply  as  to  American  ports.  For  this  reason  the 
Algoraa  StPt'l  Corporation  purchaseC  coal  areas  m  West 
Virginia  in  1911.  The  admission  of  .vking  coal  for  smelt- 
ing purposes,  subject  to  the  drawback  of  99  per  cent  of  the 
duty,  has  no  doubt  been  a  distinct  advantage,  especially 
to  the  Algoma  Steel  Corporatior,  which  found  it  possible 
to  build  coke  ovens  at  its  steel  plant  at  Sault  Ste.  Mane. 
Coke  itself  has  been  on  the  free  list  for  the  benefit  of  all 
Canadian  manufacturing  mdustries. 

§  3.  It  is  a  common  feature  of  economic  development 
that  changed  technical  conditions '  of  an  industry  are  re- 
flected in  the  lagging  or  in  the  progress  made  by  the  indus- 
try of  a  particular  country.  England  long  held  supremacy 
in  the  iron  industry  because  of  unsurpassed  fuel  supplies. 
The  younger  industry  of  the  United  States,  handicapped 
by  a  later  start  and  widely  separated  natural  resources, 
won  the  ascendancy  by  a  conct^ntrated  study  of  intensified 
production,  the  use  of  mc?hanivai  applications  and  labor- 
saving  devices,  and  the  assistance  of  cheap  transportation. 
A  part  of  this  progress  has  been  die  to  changes  in  the 
methods  of  producing  iron  and  steel,  and  these  develop- 
ments are  favoring  the  growth  of  the  Canadian  as  well  as 
the  American  industry.  The  iron  first  proc.uced  in  Canada, 
as  in  the  United  States,  was  charcoal  iron.   E\en  at  the 
present  time  three  or  four  Canadian  furnaces  produce  a 
small  output  of  this  kind  of  iron.  In  1899  the  Canada  Iron 
Furnace  Company  planned  to  use  charcoal  as  fuel,  and  the 

'  See  J.  R.  Smith,  The  Story  of  Iron  and  Steel,  and  Chisholm,  Commer- 
cial Gcograpny. 


8*  ' 


THE  CAUSES  OF  RECENT  PROGRESS    «91 

Algoma  Steel  Company  buUt  charcoal  furnaces  as  late  as 
1902,  but  both  of  these  companies  have  found  the  use  of 
coke  more  advantageous.  As  a  matter  of  fact,  the  iron  m- 
dustry  is  past  this  sUge  and,  except  under  conditions  where 
the  product  is  of  exceptional  quality  or  the  supply  of  char- 
coal unusually  good  and  cheap,  the  use  of  charcoal  is  really 
a  detriment  to  the  industry.  The  next  great  techmcal  de- 
velopment was  the  use  of  coke.  This  gave  supremacy  m 
iron-making  to  western  Pennsylvania,  and  Pittsburg  be- 
came the  capital  of  the  iron  world  in  what  might  be  called 
the  "ConneUsviUe  Coke"  epoch.    More  recently  it   has  | 
been  found  possible  to  use  coal  of  poorer  quality  than  that  , 
found  in  the  ConnellsviUe  district.  As  a  result,  the  area  of 
successful  blast  furnaces  of  the  most  modem  type  is  spread- 
ing, and  \ova  Scotia  measures  have  thus  been  included  in 
the  supply  of  coal  of  coking  quality,  much  to  the  advantage 
of  the  Canadian  iron  and  steel  industry. 

As  iron  ore  is  rarely  found  p«ue,  the  iron,  when  run  off 
and  moulded  into  pigs,  always  contains  too  high  a  propor- 
tion of  carbon,  and  sometimes  of  sulphur  and  phosphorus, 
which  are  injurious  to  its  quality.  It  is  because  of  excess 
of  carbon  that  cast  iron  is  converted  into  wrought  iron  or 
malleable  iron  through  eliminating  some  of  the  carbon  by 
a  process  called  puddling. 

By  1870  the  Bessemer  process  of  making  steel  had  been 
well  developed.  Steel  contains  less  carbon  than  cast  u-on 
and  more  than  wrought  iron,  and  is,  therefore,  less  easUy 
bent  than  wrought  ut)n,  and  less  easily  broken  than  cast 
iron.  Hence,  it  is  particularly  well  adapted  to  modem 
necessities,  and  between  1880  and  the  present  time  it  has 
practically  taken  the  place  of  bar  iron  in  the  finishing  m- 

dustri'^s. 

By  the  Bessemer  process  the  molten  pig  iron  is  run  mto 
a  large  pear-shaped  vessel,  a  converter,  throu-^-  which  air 
is  forced  until  the  carbon  is  all  consumed.  1  nen  the  com- 
pound of  iron,  containing  the  necessary  amount  of  carbon. 


M 


'3SE|^J 


S'ti-S'.'UFif^ 


292    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

is  added  and  mixed  by  blowing.  Ferro-manganese  is  added 
to  make  the  steel  less  brittle.  Unfortunately,  although  sul- 
phur can  be  eliminated  by  the  use  of  a  limestone  or  basic 
slag  and  a  very  high  temperature  in  the  smelting  of  the 
ores,  or  by  roasting  ores  before  they  are  charged  to  the 
blast  furnace,  phosphorus,  an  impurity  quite  common  in 
Canadian  ores,  cannot  be  controlled  by  the  smelting- 
master.  Yet  a  small  amount  of  it  is  practically  ruinous  to 
iron,  making  it  brittle.  For  a  long  time,  therefore,  many 
otherwise  good  ores  were  useless.  Newfoundland  ores  and 
the  Helen  Mine  ores  contain  a  considerable  amount  of 
phosphorus,  and  were  only  made  available  for  steel-making 
by  recent  inventions. 

The  first  invention  to  meet  this  diflBculty  was  made  in 
1878,  when  the  so-called  basic  Bessemer  process  was  de- 
vised. ^  Many  American  ores  are,  however,  either  too  low 
or  too  high  in  phosphorus  to  be  classed  as  Bessemer  ores 
at  all.   Fortunately  for  Canada,  these  non-Bessemer  ores 
are  not  completely  useless.  In  1856  Messrs.  Siemens  took 
out  patents  for  the  open-hearth  process  of  steel-making, 
and  in  1864  improvements  were  made  by  a  Frenchman 
named  Martin.  This  Siemens-Martin  process  differs  from 
the  Bessemer  process  in  that  flames  play  over  the  molten 
metal  instead  of  being  blown  into  it.  As  the  fuel  supply  is 
entirely  independent  of  the  iron,  the  process  can  go  on  so 
long  as  is  necessary.  Meanwhile  it  is  under  perfect  control, 
and  samples  of  the  product  can  be  taken  and  examined,  and 
the  contents  of  the  furnace  changed  until  the  steel  is  satis- 
factory. The  process  takes  more  time,  and  is  more  costly, 
but  the  quality  of  the  product  is  more  uniform.  Because 
of  these  features,  combined  with  the  application  of  the  prin- 
ciple involved  in  the  basic  process,  the  basic  open-hearth 
furnaces  have  been  able  to  use  a  large  amount  of  otherwise 
worthless  ores.  Practically  all  Canadian  steel  furnaces  are 
of  the  basic  open-hearth  type.  The  Dominion  Steel  Cor- 
J  A  limestone  linlag  is  used  to  extract  the  phosphorus  from  the  iron. 


I' 


THE  CAUSES  OF  RECENT  PROGRESS        293 

poration.  after  some  loss  on  expenditures  for  Bessemer 
furnaces,  installed  the  ba^ic  furnaces,  which  were  more 
suitable  for  treating  the  iron  made  from  Newfoundland 
ores.  Likewise,  as  the  Helen  Mine  ores  were  of  a  kmd  that 
required  the  basic  process,  the  Lake  Superior  Corporation 
installed  basic  furnaces  and  is  now  using  its  own  ores  from 
the  Helen  Mine,  the  output  of  which  it  shipped  previously 
to  the  United  States.  Nearly  all  other  Canadian  steel  fur- 
naces are  of  this  basic  open-hearth  type  for  which  New- 
foundland ore  and  Helen  Mine  ore  are  well  adapted    This 
fact,  combined  with  the  relat  ively  high  price  of  open-hearth 
steel,  and  the  rapid  expansion  of  the  open-hearth  output 
helps  to  explain  the  great  development  of  the  Canadian 
industry  and  speaks  well  for  its  future,  whether  or  not 
taritf  or  bounty  protection  is  granted. 

§  4   Before  considering  the  desirability  of  the  protective 
policy  from  the  point  of  view  of  the  consumer,  it  may  be 
wise  to  point  out  the  influence  of  the  Canadian  market  on 
the  development  of  the  industry.   That  the  market  has 
developed  need  scarcely  be  emphasized.  An  expansion  of 
railway  mileage  by  10,000  miles  in  sixteen  years  would  of 
itself  be  ample  evidence  of  increased  consumption.    More 
definitely,  the  consumption  of  iron  and  steel  of  all  kinds 
increased  from  about  $40,000,000  annually  for  the  period 
from  1881  to  1896  to  about  $170,000,000  in  V.)10.  and  the 
prosperity  of  recent  years.  1910  to  1913.  has  raised  the 
annual  consumption  to  over  $250,000,000.^  In  other  words, 
the  consumption  increased  in  value  over  four  times  from 
1896  to  1910  and  over  six  times  by  1913.  The  consumption 
of  pig  iron  increased  from  about  110,000  tons  annually  for 
the  period  1891  to  1896  to  912,371  tons  m  1910  and  1,280,- 
176  in  1913.'  The  consumption  of  steel  ingots,  biUets,  and 

1  See  Appendix  A.  „  rr.  i_i    tt 

«  See  Appendix  G.  Table  I.  and  Appendix  C.  Table  U 
»  See  Appendix  B,  Table  I. 


^?^..M 


;  '1    I 


n 


294    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

bars  has  rapidly  increased  from  about  25,000  tons  annually 
for  the  period  1894  to  1900  to  (  .  cr  200,000  tons  annually 
m  1902  and  1903,  and  to  nearly  1,000,000  tons  in  1912.i 

The  value  of  this  home  market  to  the  Canadian  prod- 
ucts varies  from  time  to  time,  as  the  varying  amounts  of 
the  imports  show.  In  times  of  depressii  n  the  market  is  less 
extensive,  and  tliere  is  more  danger  of  American  competi- 
tion and  a  decrease  in  prices.  For  instance,  the  wonderful 
revival  of  the  iron  trade  in  the  years  1897  to  1899  brought 
with  it  an  advance  in  price  *  which  was  most  beneficial  to 
the  Canadian  industry.  Railways  that  had  been  econo- 
mizing for  a  few  years  began  to  make  large  expenditures 
and  the  United  States  steel  mills  had  not  the  capacity  to 
supply  the  demand.  It  was  during  this  period  that  the 
"Soo"  Mills,  the  Dominion  Iron  and  Sleel  Company,  the 
Midland  Furnace,  the  Hamilton  Steel  Furnaces,  and  the 
Deseronto  Furnace  were  built.  The  years  1899  to  1902 
were  auspicious  years  for  the  development  of  an  iron  and 
steel  industry. 

Although  the  depression  of  1907  to  1908  somewhat  cur- 
tailed the  market,  the  Dommion  Iron  and  Steel  Company 
was  able  to  find  purchasers  abroad.  Rapid  railway  con- 
struction soon  revived  the  demand  and  the  Canadian  com- 
panies have  ordinarily  found  the  market  quite  favorable. 

§  5.  Probably  the  most  striking  sign  of  industrial  prog- 
ress in  recent  years  is  the  increasing  size  of  industrial  enter- 
prises, and  this  feature  is  of  considerable  significance  in  the 
recent  development  of  the  Canadian  iron  and  steel  indus- 
try. 

The  manufacture  of  iron  and  steel  requires  the  invest- 
ment of  a  very  large  amount  of  capital.  Most  modem  steel 
companies  own  and  operate  not  only  blast  furnaces,  but 
also  ore  deposits,  coal  measures,  coke  ovens,  steel-making 
furnaces,  and  finishing  mills  of  various  kinds.  The  com- 
I  See  Appendix  B,  Tiible  VI.  '  Sec  Appcadk  H. 


r 


I  ■ 


'{ 


M 


THE  CAUSES  OF  RECENT  PROGRESS         995 

panics  that  produce  only  one  primary  product  are  of  little 
importance  in  Canada,  and  their  history  has  not  been 
marked  by  conspicuous  success.  Such  companies  as  the 
Dominion  Steel  Corporation,  the  Lake  Superior  Corpora- 
tion, the  Canada  Iron  Corporation,  and  the  Steel  Company 
of  Canada  own  and  operate  mines,  coke  ovens,  blast  fur- 
naces, and  steel  furnaces,  and  usually  manufacture  several 
lines  of  finished  articles. 

A  policy  of  industrial  integration  once  adopted  involves 
the  constant  problem  of  working  out  a  well-balanced  and 
coijrdinated  plant  through  the  adjustment  of  one  depart- 
ment to  another.   In  practically  no  case,  however,  is  a  back- 
ward move  made,  and  this  modem  principle  of  economic 
organization  becomes  a  dynamic  force  to  develop  and  ex- 
pand an  industry,  which  has  already  proved  a  success,  into 
a  most  eflBcient  establishment.  Just  here  a  few  Canadian 
illustrations  may  be  of  interest.  For  instance,  the  "Soo" 
steel  and  rail  mills  were  closed  down  in  1902,  owing,  in  part, 
to  the  lack  of  a  supply  of  pig  iron,  and  the  company  found 
itself  forced  to  build  more  blast  furnaces  to  supply  pig  iron 
at  a  cost  lower  thnn  the  price  that  would  have  been  paid 
were  the  iron  purchased  in  the  open  market.  New  open- 
hearth  furnaces  and  coke  ovens  were  added  for  the  same 
reason.  In  more  recent  years  the  company  foimd  the  sup- 
ply of  iron  ore  suflBcient  to  justify  an  addition  not  only  to 
the  primary,  but  also  to  the  finishing,  stages  of  manufac- 
ture. 

The  history  of  no  other  company  reveals  this  principle 
better  than  liat  of  the  Nova  Scotia  Steel  and  Coal  Com- 
pany. The  production  of  finished  articles  has  always  been 
the  strong  feature  of  this  well-known  company,  and  its 
business  has  steadily  followed  that  increase  in  the  market 
which  we  have  already  considered.  This  has  necessitated 
the  continuation  of  a  policy  begun  as  early  as  1882.  At 
that  time  it  was  decided  to  build  a  steel  plant  to  supply 
steel  to  the  Nova  Scotia  Forge  Company.  More  recently 


1 

^  i 


.if 


Ill' 


296    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

the  building  of  the  Sydney  Mines  blast  funiace  in  1902  be- 
came absolutely  necessary,  if  the  more  advanced  lines  of 
business  were  to  be  continued.  The  supplies  of  pig  iron  and 
of  steel  have  made  possible  the  extension  of  the  business 
into  every  field  in  which  the  company  has  believed  it  could 

make  a  profit. 

The  prosperous  organization  of  the  business  of  the  Do- 
minion Iron  and  Steel  Company  has  called  for  continual 
readjustment  for  increased  business.  Some  pig  iron  was 
exported  for  a  year  or  two  until  the  finishing  mills  could  be 
put  in  satisfactory  running  order.  The  addition  of  a  rod 
mill,  even  before  the  bounties  on  rods  were  granted  is  a 
splendid  illustration  of  this  principle,  which  was  exempli- 
fied again  in  1911  and  1912  by  the  building  of  mills  to  use 
the  wire  rods  in  the  manufacture  of  finished  articles.  The 
constant  additions,  made  to  various  branches  of  the  plant 
from  time  to  time,  illustrate  this  growing  tendency  to  re- 
duce costs  to  meet  market  competitors  by  addmg  to  the 
plant.  This  same  policy  has  been  followed  by  the  Hamil- 
ton Company  in  the  construction  of  steel  furnaces,  an  ad- 
ditional blast  furnace,  and  also  rod  mills  to  supply  the 
necessary  raw  materials  to  the  plants  now  controlled  by 
the  Steel  Company  of  Canada. 

This  is  no  theoretical  explanation.  The  Dominion  Steel 
Corporation  has  adopted  the  conscious  policy  of  reducmg 
costs  by  extending  its  plant  in  order  to  place  itself  m  a 
position  to  stand  the  gradual  loss  of  bounties.  For  in- 
stance, Mr.  Plummer,  the  president,  said  in  his  1911  Re- 
port: "It  is  no  use  shirking  the  fact  that  it  will  hurt  us  in 
many  ways  to  have  our  rod  business  disorganized  (by  the 
passing  of  the  bounties),  but,  as  we  s-iid  in  our  report,  we 
have  every  confidence  that  tlie  effect  will  be  overcome 
when  the  plant  is  completed.  By  this  we  mean  the  com- 
pletion of  the  wire  and  nail  mills  which  the  changed  con- 
ditions make  it  necessaiy  for  us  to  erect.  This  will  take 
time,  and  even  when  complete  they  will  not  for  some  time 


THE  CAUSES  OF  RECENT  PROGRESS         897 

give  full  employment  to  our  rod  mill,  but  we  have  no 
doubt  of  our  ability  to  finish  in  marketable  form  all  the 
material  we  can  turn  out."  »  In  1912  the  results  of  the 
policy  were  being  realized.  This  same  principle  was 
avowedly  applied  in  the  development  of  the  blast  furnace 
and  steel  mills  in  preparation  for  the  loss  of  bounties  on  pig 
iron  and  steel  billets.*  Strangely  enough,  the  loss  of  boun- 
ties appears  to  have  forced  the  corporation  to  see  the  value 
of  large-scale  production  and  integration  of  industry,  and 
in  this  way  actually  developed  the  industry. 

§  6.  Most  of  the  fundamental  conditions  of  the  recent 
development  of  the  Canadian  iron  and  steel  industry  have 
already  been  considered.  The  avaUability  of  resources,  the 
growth  of  the  market,  and  the  introduction  of  large-scale 
production  seem  of  especial  importance;  indeed,  the  direct 
connection  of  these  factors  with  the  progress  of  the  in- 
dustry is  obvious. 

A  number  of  other  conditions  hf»ve  been  favorable  to 
recent  developments.    Large-scale  production  has  been 
made  possible  by  the  avaUability  of  an  increasing  amount 
of  British  and  American,  as  well  as  Continental  and  Ca- 
nadian, capital.    Indeed,  the  great  danger  is  that  Canada 
may  have  been  over-borrowmg.   However,  sound  indus- 
trial enterprises,  conservatively  financed,  should  not  fear 
the  future.  The  Nova  Scotia  Steel  and  Coal  Company  has 
always  been  favored  with  ready  fijiancial  recognition.  The 
Dominion  Iron  and  Steel  Company  was  less  fortunate  for 
a  period  of  years,  but  it  is  undoubtedly  true  that  recent 
years  have  seen  a  return  of  financial  favor  due,  partly  to 
the  ending  of  the  previous  conflict  and  uncertainty  over 
the  coal  contracts,  and  partly  to  more  conserv'ative  man- 
agement by  Canadian  financiers. 

Recently  there  has  been  a  tendency  to  emphasize  the 
importance  of  management  m  Canadian  industry.   Since 
»  Annual  RepoH,  1911.  pp.  8-9.  *  Ibid..  1918.  p.  10. 


•"ir^i';wisw^^ia&>''^.; 


'iri 


t  s  ;i  . 


It^ 


398    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

1903  the  management  of  the  Dominion  Iron  and  Steel 
Company  has  been  aggressive,  yet  efficient,  as  compared 
with  the  extravagant  and  almost  ignorant  operations  of 
the  first  manager.  Since  1910  there  has  been  a  further 
change  in  the  direction  of  a  more  efficient  organization  of 
the  whole  steel  corporation  business  under  Mr.  M.  J. 
Butler.  The  Nova  Scotia  Steel  Company  and  the  various 
establishments  carried  on  by  the  Drummonds  and  the 
McDougalls  have  always  been  models  of  good  manage- 
ment, and  there  is  no  doubt  that  the  industrial  operations 
of  the  Steel  Company  of  Canada  have  been  and  will  con- 
tinue to  be  properly  conducted.  The  Consolidated  Lake 
Superior  Company  failed  largely  because  Mr.  Clergue  had 
little  technical  knowledge,  and  because  his  unbounded  and 
somewhat  unbalanced  imagination  led  him  into  the  most 
extravagant  forms  of  finance  Under  the  control  of  Mr. 
T.  J.  Dnimmond  and  his  assistants,  the  Lake  Superior 
Company  has  been  gradually  regaining  for  the  "Soo"  in- 
dustries the  respect  of  the  Canadian  public. 

The  UhoT  supply  in  Canada,  too,  has  become  more  satis- 
factory. The  Dominion  Iron  and  Steel  Company  brought 
men  from  England  until  the  work  could  be  taught  to  Ca- 
nadians. At  the  present  time  there  is  a  satisfactory  supply 
of  skilled  labor,  and  immigration  is  continually  supplying 
recruits  for  the  ranks  of  iron  and  steel  workers.  The  strikes 
at  the  coal  mines  in  Nova  Scotia  were  for  a  long  time  a 
source  of  trouble,  but  the  Dominion  Steel  Corporation  has 
apparently  secured  entire  control  of  this  situation  in  re- 
cent years. 

§  7.  ^.lost  of  these  fundamental  conditions  were  as 
favorable  for  the  growth  of  the  Canadian  industry  as  for 
tliv.  growth  of  the  industry  in  the  United  States,  so  the 
Canadian  industry  was  not  in  danger  of  severe  competi- 
tion. The  Cape  Breton  industry  was  especially  favored  by 
location  near  coal  fields  to  which  ores  can  be  cheaply 


THE  CAUSES  OF  RECENT  PROGRESS    m 

brought  by  water.  It  is  near  the  European  market;  it  can 
ship  by  rail  or  water  to  the  market  in  Quebec  and  Ontario 
or  the  Maritime  Provinces.  The  industry  on  the  mainland 
of  Nova  Scotia,  especially  at  Londonderry,  as  well  as  the 
primary  industry  at  Trenton  and  New  Glasgow,  has  not 
been  a  success  because  of  lack  of  ores.  The  Quebec  mdus- 
try  has  been  handicapped  by  the  lack  of  local  ore  and  coal. 
Most  Quebec  ores  contain  titanium,  which  makes  them 
hard  to  smelt;  as  yet  no  satisfactory  process  for  workmg 
such  ores  has  been  put  in  operation. 

The  Hamilton  Furnaces  are  situated  in  the  center  of  a 
large  and  growing  market  area.  HamUton  is  favored  by 
adequate  transportation  facilities,  both  by  water  and  rail, 
and  ore  and  coal  can  be  laid  down  at  Hamilton  almost  as 
cheaply  as  at  other  Lake  ports.  The  industries  at  the 
"Soo,"  at  Midland,  and  Port  Arthur  are  more  favorably 
situated  for  the  supply  of  coal  than  the  recently  buUt  fur- 
naces  at  Duluth,  and  they  can  secure  ore  at  a  cost  almost 
as  low  as  the  furnaces  at  Duluth,  ar-l  certainly  at  a  lower 
cost  than  can  furnaces  at  Lake  Erie  ports  or  in  Ohio  or 

Pennsylvania.  . 

In  general,  labor  is  as  cheap  and  as  efficient  in  Canar'a 
as  in  the  United  States.  Capital  is  now  as  freely  offered; 
the  Canadian  market  is  expanding  very  rapidly;  techmcal 
developments  favor  the  Canadian  industry;  and  ore,  coal, 
and  coke  for  smelting  purposes  are  admitted  free  of  duty. 
Although  the  Canadian  market  is  much  smaller  than  the 
American  market,  and  the  scale  of  operations  is  smaller, 
Canadian  disadvantages  of  the  earlier  periods  have,  to  a 
very  considerable  extent,  disappeared.  Practically  all  the 
Canadian  furnaces  would  rank  among  the  number  of  fur- 
naces in  operation  in  America  in  a  ti^ne  of  ordinary  in- 
dustrial conditions,  even  if  protection  were  abolished. 

§  8.  On  a  priori  grounds  there  is  room  for  assuming  that 
protects -■  has  assisted  the  Canadian  iron  and  steel  indus- 


11 


l^^.^iiS£iHSBgL^^^gi2!2l^1% 


SOO    THE  C.YNaDIAN  IRON  AND  STEEL  INDUSTRY 

try  by  maintaining  prices  and,  therefore,  augmenting  the 
Canadian  output  by  the  addition  of  a  few  small  plants.  If 
prices  are  kept  up  by  the  tariff,  or  if  higher  costs  of  produc- 
tion are  offset  by  bounties,  new  competitors  are  enabled  to 
enter  the  field,  or  inferior  and  antiquated  plants  may  be 
kept  running  at  a  profit.  It  is  more  difficult  to  prove  that 
the  determining  factor  in  the  building  of  iron  and  steel 
plants  has  been  either  the  bounties  or  tlie  tariff,  but  we  can 
recal'  whatever  evidence  we  htve  had  of  the  coincidence 
of  the  landmarks  of  progress  with  the  granting  of  duties  and 
bounties. 

In  the  first  place,  several  of  the  now  prominent  iron  and 
steel  industries  were  already  in  existence  in  1897.    The 
Nova  Scotia  Steel  Company,  the  Hamilton  Blast  Furnace 
Company,  the  Canada  Iron  Furnace  Company,  as  well  as 
many  smaller  establishments,  ha<l  already  a  fairly  impor- 
tant business.    In  spite  of  the  decrease  of  protection  in 
1897,  these  continued  to  prosper  and  expand.  The  Nova 
Scotia  Steel  and  Coal  Company  built  furnaces  at  Sydney 
Mines  in  1902,  at  a  time  when  the  bounties  were  about  to 
decline.!  This  Cape  Breton  industry  would  have  grown  up 
whether  or  not  bounties  had  been  granted.   From  time  to 
time  furnaces  have  been  built  and  finishing  mills  added 
with  little  or  no  reference  to  changes  in  tlie  tariff.   Like- 
wise the  Canada  Iron  Furnace  Company  built  a  furnace 
at  Midland  in  1899,  before  the  renewal  of  bounties  was 
assured,  and  in  l'"*9  another  furnace  was  added,  when  the 
bounties  were  abiut  to  disappear.    In  like  manner  the 
Hamilton  Company  continued  to  expand,  even  though  it 
found  itself  unable  to  use  as  much  Canadian  ore  as  it  had 
expected,  and  therefore  failed  to  obtain  the  higher  bounty. 
A  steel  plant  was  added  in  1900,  after  the  reduction  of 
duties  on  billets  had  been  but  partially  compensated  for  by 
an  increase  of  the  bounties  on  billets  from  $2  to  $3  per  ton, 
and  in  1906  an  additional  blast  furnace  was  decided  upon 
»  Mr.  Graham  Fraser's  letter  to  Mr.  W.  M.  Whitney,  re  bounties. 


THE  CAUSES  OF  RECENT  PROGRESS        801 


even  before  the  extension  of  the  bounty  system  was  as- 
sured. The  years  lyll  and  1914  have  scf;n  the  addition  of 
rod  riiills  after  tlie  disapiMiarancc  of  bounties  when  the  recent 
grant  of  tariff  duties  on  rods  was  by  no  means  assured. 

Since  the  reduction  of  protection  in  1897  much  progress 
has  been  made  by  entirely  new  firms  and  in  ;  '.together  new 
centers.  Even  before  the  bounty  legislation  of  1899  was 
passed,  the  Dominion  Iron  and  Steel  Company  had  pur- 
chased iron-ore  deposits  and  had  located  the  site  of  the 
proposed  works  at  Sydney;  the  brickwork  of  the  blast  fur- 
nace was  finished  three  months  after  the  Bounty  Act  had 
been  passed.  There  is  evidence  that  building  operations 
were  actually  delayed  in  order  th;it  the  Government  might 
feel  more  responsibility  for  the  renewal  of  the  bounties. 
Thus  it  appears  that  the  bounties  in  that  respect  actually 
retarded  development.  Since  1902  blast  and  steel  furnaces, 
rolling  mills,  and  finishing  mills  have  been  added  from 
time  to  time.  Blast  furnaces  were  built  from  1910  to  1912, 
when  it  was  known  that  the  bounties  would  end;  a  rod  mill 
was  built,  even  before  bounties  were  paid  on  wire  rods;  the 
building  of  the  rail  mill  in  1904  depended  upon  the  possi- 
bility of  rounding  oal  the  plant  rather  than  -.ipon  the  tariff 
duty  imposed  in  1904.  Both  the  rod  and  rail  mills  were 
planned  long  before  protection  to  those  branches  of  the 
industry  had  been  assured.  Nail  and  wire  mills  were  built 
in  1911  to  consume  the  output  of  the  rod  mill.  The  com- 
pany hoped  by  thus  extending  the  scale  of  operations  to 
offset  the  loss  of  bounties  by  reducing  the  cost  per  unit  of 
product,  so  it  seems  tlmt  the  reduction  of  protection  actu- 
ally forced  further  additions  to  the  plant.  It  wa<»  an  avowed 
l>olicy  of  the  Dominion  Iron  and  Steel  Company  to  expand 
the  plant  and  thus  reduce  costs  in  order  to  meet  the  gradu- 
ally increasing  competition  as  the  bounty  payments  shaded 
off.  In  short,  the  growth  of  the  Dominion  Iron  and  Steel 
Company  is  a  story  most  adverse  to  the  merits  of  the  pro- 
tectionists' claims, 


i 


M 


tii 


302    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

The  Algoma  Steel  Company's  first  furnaces,  together 
with  a  rail  mill  and  a  structural  steel  mill,  were  built  in  1901 
to  1902.  The  rail  mill  was  first  put  in  operation  in  1902  on 
a  contract  for  raUs  for  the  Dommion  Government,  but  not- 
withstanding the  extraordinary  price  paid  for  the  rails, 
the  whole  plant,  including  the  pulp,  paper,  steel,  and  chemi- 
cal mills,  the  mines,  the  raUways,  and  the  power  plant,  was 
closed  down.  Duties  were  not  imposed  on  steel  rails  until 
1903.    After  a  much-needed  financial  reorganization,  the 
company  has  made  rapid  progress.  The  addition  of  coke 
blast  furnaces  and  open-hearth  steel  furnaces  since  that 
reorganization  has  been  due  to  industrial  causes  rather 
than  protection.  Since  1910  the  building  of  new  mills  and 
plants  has  been  regarded  as  a  necessary  move  to  meet  the 
effects  of  the  loss  of  bounties.   The  United  States  Steel 
Corporation  recently  decided  to  build  blast  furnaces,  steel 
furnaces,  rod,  rail,  and  finishing  mills  at  Sandwich,  On- 
tario, in  spite  of  the  fact  that  the  bounties  were  no  longer 

payable. 

Since  1897  a  few  small  establishments  have  been  put  m 
operation  for  various  reasons.  The  Deseronto  Furnace  was 
buUt  in  1898  because  the  United  States  Tariff  of  1897  had 
imposed  a  duty  on  charcoal,  and  a  new  market  for  charcoal 
made  at  that  place  seemed  necessary.   The  Port  Arthur 
Furnace  was  planned  as  eariy  as  1904,  when  it  seemed  that 
the  bounties  would  shortly  disappear.   The  construction 
work  was  done  in  1906  and  1907  before  the  renewal  of 
bounties  was  finally  decided  upon.    The  bounty  system 
failed  signally  to  stimulate  the  use  of  native  ores.    Ihe 
revision  of  the  tariff  in  1914  may  put  an  end  to  an  arti- 
ficial delay  in  building  mills  for  the  production  of  heavier 
sections  of  structural  steel,  but  it  is  not  apt  to  lead  to  the 
building  of  additional  rod  mills  so  long  as  the  present  mills 
are  capable  of  supplying  the  Canadian  demand. 

There  seems  to  be  little  evidence  of  the  direct  construc- 
tive influciicc  of  protection  on  the  rec^ent  growth  of  the 


mm^. 


1 


THE  CAUSES  OF  RECENT  PROGRESS   SOS 

Canadian  iron  and  steel  industry.  One  might  argue  that 
the  protective  policy  was  applied  to  the  primary  industry 
under  especially  favorable  cond'+ions,  and  was,  therefore, 
a  success,  even  though  the  v  i  u<,  l  a  • .  'nn^*  of  protection  was 
being  gradually  reduced.  C  c  injght  aho  v"  im  that  higher 
protection  would  have  de\  •io;)ed  a  slill  larger  industry. 
Certainly,  such  conditions  ..^  ili^  ' "  ply  of  raw  materials 
and  the  size  of  the  market  were  much  more  favorable  than 
during  the  earlier  period. 

This  is  not,  however,  e^iuivalent  to  saying  tlirt  protec- 
tion alone  was  responsible  for  the  growth  of  the  industry; 
that  it  was  the  chief  favorable  factor;  that  tlie  industry 
would  not  have  developed  without  protection;  or  that 
higher  protection  would  have  resulted  in  the  growth  of  a 
much  greater  industry.  It  woidd  be  a  mistake,  however,  to 
say  that  protection  had  not  been  of  any  value  to  producers 
of  iron  and  steel  in  Canada,  or  that  it  had  not  stimulated 
to  some  extent  the  growth  of  the  industry.  A  great  num- 
ber of  influences,  some  of  them  interrelated,  affect  the  de- 
velopment of  an  industry.  Although  protectionists  have 
usually  assumed  that  protection  alone  should  receive  the 
credit  for  the  growth  of  the  ind'istry,  there  is  little  evidence 
in  favor  of  such  an  assumption.    It  may  have  actually 
handicapped  the  industry  at  times  by  encouraging  over- 
capitalization and  by  directing  attention  from  industrial 
to  political  matters.  The  network  of  other  favorable  con- 
ditions would  have  permitted  the  growth  of  the  greater 
part  of  the  present  industry,  even  without  protection. 
Higher  protection  would  not  have  resulted  in  the  growth  of 
a  much  greater  industry  than  at  present  exists  in  Canada. 
Since  1900  about  eighty  per  cent  of  the  annual  consump- 
tion of  pig  iron  in  Canada  has  been  produced  within  the 
country.  Certain  special  grades  of  iron  could  not  have  been 
produced  in  Canada  except  under  the  protection  of  very 
high  duties.  If  we  add  to  this  amount  of  special  iron  that 
iron  which  has  entered  Canada  practically  free  of  duty,  for 


II 

-i 

I:      J 


'        11 


804    THE  CAN.VDIAN  IRON  AND  STEEL  INDUSTRY 

use  in  the  production  of  certain  goods,  we  can  see  that 
the  Canadian  industry  could  not  have  been  much  more 
prosperous  than  it  was.  Fourteen  of  the  largest  furnaces 
are  capable  of  producing  more  than  the  annual  consump- 
tion of  pig  iron  in  Canada,  even  if  the  demand  for  special 
qualities  of  pig  iron  is  transferred  to  the  ordinary  pro- 
duct. 

In  general,  the  total  consumption  of  steel  billets  has  been 
largely  supplied  by  the  Canadian  output,  which  amounted 
to  about  1,000,000  tons  in  1912  as  compared  with  imports 
of  about  90,000  tons.^  Even  if  the  Canadian  industry  had 
produced  the  sulditional  nine  per  cent  of  the  annual  con- 
sumption, it  would  not  have  been  much  more  important 
than  it  is  to-day.  In  all  probability,  as  in  the  case  of  pig 
iron,  a  certain  part  of  this  nine  per  cent  could  not  have  been 
produc  _*d  in  Canada  even  under  high  protection,  since  there 
is  a  certain  demand  for  extraordinary  qualities  of  steel, 
especially  for  the  manufacture  of  tools. 

The  efifect  of  protection  on  the  various  lines  of  the  finish- 
ing industry  is  more  difficult  to  determme.  While  the 
amount  of  iron  and  steel  consumed  increased  verj'  rapidly, 
the  Canadian  manufacturer  failed  to  produce  as  large  a  per- 
centage of  finished  products  as  of  primary  products.  In 
the  period  1891  to  1896,  nearly  two  thirds,  in  1900  slightly 
over  one  half,  and  in  1910  nearly  two  thbds  of  the  annual 
consumption  was  produced  in  Canada.^ 

These  figures  are  not,  of  course,  so  significant  as  might 
at  first  ai)pear.  ^Much  depends  on  the  conditions  of  the 
particvdar  branches  of  the  industry.  For  instance,  a  large 
part  of  the  steel-rail  industry  probably  would  have  been 
developed  without  protection,  since  Canadian  railroads 
are  glad  enough  to  carry  their  own  rails.  Protection  did 
not  have  a  very  direct  effect  on  the  introduction  of  the  in- 
dustry .  About  ninety  per  cent  of  the  annual  consumption 

>  See  Arocndix  B,  Table  VI. 

'  See  Ap..€ndix  C,  Table  II,  and  Appendix  G,  Table  II. 


THE  CAUSES  OF  RECENT  PROGRESS 


305 


of  steal  rails  b  prot  iced  in  Canada,  and  the  Canadian  mills 
are  capable  of  supplying  the  Canadian  demand  except  in 
extraordinary  years.  Certainly,  the  production  of  steel 
rails  would  not  have  been  much  more  successful  had  higher 
protection  been  given.  Althc  'gh  protection  had  a  consider- 
able value  in  the  early  years  of  the  industry,  in  recent  years 
the  Canadian  mills  have  been  so  su  jessful  that  protection 
might  have  been  reduced  without  injuring  their  business 
as  much  as  the  high  duty  has  hampered  the  building  and 
maintenance  of  railways  in  Canada. 

The  manufacture  of  steel  rods  was  proposed  and  begun 
before  bounties  were  offered,  and  in  1912  and  1913  the 
Steel  Company  of  Canada  added  rod  mills  when  the  boun- 
ties had  disappeared  and  duties  did  not  seem  to  be  forth- 
coming. The  Canadian  mills  are  capable  of  supplying  all 
the  Canadian  demand;  certainly,  they  are  assured  of  the 
larger  part  of  the  demand  for  wire  rods,  since  they  use  an 
increasing  amount  of  their  rods  in  their  own  finishing  mills. 
A  certain  part  of  the  demand  for  rods,  that  for  the  manu- 
facture of  certain  kinds  of  wire,  may  be  supplied  from  the 
United  States  unless  Jie  Canadian  mills  are  willing  to  let. 
outsiders  have  wire  rods  at  a  price  as  low  as  the  expense  of 
supplying  rods  to  their  own  finishing  mills,  or  as  low  as 
other  firms  are  willing  to  accept  for  rods. 

The  lack  of  protection,  together  with  other  unfavorable 
conditions,  injured  several  industries,  such  as  the  tin- 
plate  industry.  The  abolition  of  protection  for  makers  of 
barbed  wire  has  apparently  ruined  their  business.  No 
doubt  discrepancies  in  the  wording  of  tariff  items  retarded 
the  production  of  certain  goods,  as,  for  instance,  structural 
steel  weighing  over  forty -five  pounds  per  lineal  yard.  On 
the  other  hand,  if  manufacturers  of  agricultural  imple- 
ments have  been  at  a  disadvantage  by  reason  of  the  reduc- 
tion of  protection,  it  has  not  been  apparent,  since  they  are 
well  known  in  the  markets  of  the  world  and  as  Canadian 
exports  exceed  Canadian  imports.    Yet  the  rapid  devel- 


m 


! "  I 


ikk 


E^ 


Hi. 


li 


306    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

opment  of  Canada  has  resulted  in  a  very  great  demand 
for  articles  which  are  grouped  as  manuf actiires  of  iron  and 
steel,  such  as  agricultural  implements,  cream  separators, 
cutlery,  threshing  machines,  gas  and  steam,  portable  and 
stationary  engines,  typewriters,  mining  machinery,  etc.; 
all  highly  finished  products.  In  fact,  about  half  of  Can- 
ada's imports  are  composed  of  such  articles.  In  times  of 
prosperity,  when  imports  of  iron  and  steel  are  apt  to  be 
large,  the  Canadian  mills  are  unable  to  keep  up  to  the 
Canadian  demand.  The  unusual  extent  of  railway  con- 
struction, building,  and  other  work  in  special  years  has 
frequently  resulted  in  an  extraordinary  importation  of 
certain  iron  and  steel  goods.  It  is  proverbial  that  a  good 
crop  in  western  Canada  leads  to  vast  purchases  of  agri- 
cultural implements. 

With  the  exception  of  those  producers  who  may  import 
iron  and  steel  subject  to  drawbacks  of  the  duty,  the  prices 
of  the  primary  products  —  that  is,  the  raw  materiab  used 
by  the  manufacturers  of  finished  products  —  have  beex. 
higher  than  they  might  have  been.  Fortunately  the  dump- 
ing of  American  products  has  kept  the  price  of  pig  iron  and 
steel  lower  than  it  might  otherwise  have  been.  Neverthe- 
less, those  who  want  the  drawback  system  continued  and 
those  who  want  it  abolished  agree  that  the  duties  are  of 
some  value  to  the  producers  of  pig  iron  and  steel  and  a 
detriment  to  producers  of  finished  goods. 

In  considering  the  possible  effects  of  high  protection, 
we  ought  to  notice,  too,  that  a  great  part  of  the  demand 
for  iron  and  steel  goods  is  scattered  over  a  great  many 
items.  The  demand  for  special  finished  products,  such  as 
gas  engines,  is  apt  to  be  so  limited  in  Canada  that  one 
small  plant  might  supply  the  whole  demand.  The  manu- 
facture of  many  finished  products  is  also  affected  by  con- 
trol of  patent  rights,  and  consequently,  until  the  demand 
for  such  products  becomes  more  extensive,  production  is 
apt  to  be  carried  on  in  American  or  British  factories  and 


THE  CAUSES  OF  RECENT  PROGRESS         807 

mills.  The  sum  total  of  imports  of  all  such  highly  special- 
ized articles  may,  nevertheless,  be  very  great. 

While  we  have  not  enough  information  on  which  to  base 
a  detailed  estimate  of  the  efifect  of  protection  on  many 
articles,  yet  we  can  say  that  some  industries  have  been 
handicapped  by  the  lack  of  protection,  some  have  been 
handicapped  by  the  duties  on  the  raw  materials,  pig  iron 
and  steel,  some  would  not  have  developed  even  had  higher 
protection  been  granted,  and  some  would  have  realized  a 
considerable  development  even  if  the  protective  policy  had 
favored  them  less  than  it  did. 

In  general,  one  may  conclude  that  the  primary  industry 
grew  up  largely  because  of  favorable  industrial  conditions, 
rather  than  because  of  protection,  and  certain  branches  of 
the  finishing  industry  did  not  grow  up  because  the  duties 
on  pig  iron  and  steel  increased  the  cost  of  production,  or 
because  protection  was  not  high  enough  for  this  stage  of 
Canadian  industrial  history.  In  short,  it  would  have  been 
desirable  to  reduce  or  abolish  the  duties  on  certain  primary 
products  and  to  avoid  protection  to  certain  finished  prod- 
ucts, and  at  the  same  time  it  would  have  been  advisable 
to  give  more  protection  to  the  producers  of  certain  finished 
products. 


Inll 


»': 


.i 


^m 


■  t  ■  '■ 


■I  i 


CHAPTER  XII 

CONCLUSION 

■g  1.  Canada  has  been  an  iron-producing  nation  since 
1730,  but  for  many  years  the  industry  was  very  small,  and 
most  of  the  furnaces  that  were  built  did  not  remain  in  blast 
for  a  long  period.  On  very  few  occasions  before  1879  were 
more  than  three  furnaces  in  blast  at  once.  At  the  end  of 
the  period  prior  to  the  adoption  of  the  "National  Policy" 
in  1879,  there  were  only  two  furnaces  in  blast  in  Canada, 
and  of  tiiese  the  one  at  St.  Maurice  Forges  was  soon 
abandoned,  and  the  other  at  Londonderry  was  not  a  finan- 
>  cial  success. 

Yet  one  should  not  expect  too  much  of  the  mdustry  m 
this  early  period.  Canadian  mdustry  in  general  was  lagging 
behind  that  of  the  United  States.  Climatic  conditions  were 
unfavorable;  there  was  an  insufficient  supply  of  labor  be- 
cause of  emigration  to  the  United  States  and  the  absence 
of  a  large  immigration  from  Europe;  transportation  facili- 
ties were  inadequate;  markets  were  limited,  and  there  was 
a  lack  of  capital  for  industrial  enterprise.  Where  general 
industrial  development  was  so  tardy  there  could  be  litUe 
demand  for  iron  and  steel.  Although  the  building  of  rail- 
ways in  the  sixties  and  seventies  increased  the  demand  and 
stimulated  the  building  of  mUls  for  the  manufacture  of 
railway  supplies,  this  demand  was  never  large  enough  to 
require  anything  like  the  output  of  modem  industry. 
/Moreover,  previous  to  1879  the  iron  industry  received  very 
/little  protection,  and  British  and  American  iron-makers 
1  were  able  to  secure  a  large  part  of  the  existing  market. 
The  lack  of  lar^e  bodies  -^f  ore  and  the  absence  of  good  sup- 
plies in  certain  section;  -  the  country  placed  such  industry 


I! 


Ui^ 


CONCLITSION 


309 


as  was  attempted  under  ctill  greater  disadvantages.  What 
few  establishments  were  started  from  time  to  time  existed 
under  a  combination  of  especially  favorable  conditions,  and 
lasted  only  so  long  as  those  conditions  continued.  In  such 
circumstances  high  protection  would  have  been  a  mistake, 
indeed. 

Practically  the  same  general  conditions  of  growth  heldi 
for  the  next  period  from  1879  to  1897.  There  was  no  re-i 
markable  expansion  of  the  Canadian  industry  for  obviou^ 
reasons.  The  market  was  still  a  limited  one,  and  the  protec* 
tion  afforded  the  iron  and  steel  industry  could  not  have 
stimulated  a  large  increase  m  production,  even  if  the  whold 
demand  had  been  supplied  by  Canadian  firms.  Whalj 
growth  did  take  place  can  be  attributed  largely  to  a  certain; 
expansion  of  the  market,  especially  that  which  followed  the! 
railroad  building  of  1880  to  1884,  and  the  general  pros-! 
perity  of  the  period  from  1887  to  1894.  ^ 

During  this  period  the  duties  on  most  iron  and  steel 
goods  were  increased,  especially  in  the  year  1887,  but  they 
were  decreased  again  in  1894.   The  bounty  system  was 
introduced  in  1883  and  was  continued  and  extended  in 
later  years.  Protection,  which  probably  cost  the  consumers  ^ 
of  iron  more  than  the  price  of  a  plant  adequate  to  produce  j 
all  the  Government's  demand  for  iron  and  steel,  failed  to  j 
develop  an  important  mdustry.  Protection  of  the  finish- 
ing industry  did  develop  certain  branches;  in  fact,  the  out-  . 
put  beeime  so  excessive  that  combinations  were  formed  to  i 
restrict  production  and  to  maintain  prices.  Duties  on  such  j 
products  might  have  been  reduced  more  than  they  were  in 
1894. 

The  most  rapid  growth  of  the  Canadian  iron  and  steel 
industry  has  occurred  since  1897;  a  period  of  gradually  re- 
duced protection.  Although  the  annual  consumption  of 
pig  iron  is  about  twelve  times  as  large  as  in  1896,  Cana- 
dian blast  furnaces  now  produce  an  avernge  of  over  80 
per  cent  of  this  demand,  as  compared  with  an  average  of 


If: 


310    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 


it^' 


about  30  per  cent  for  the  period  from  1884  to  1892,  and 
60  per  cent  for  the  years  1893  to  1900.  The  output  of  stoel 
now  supplies  about  90  to  95  per  cent  of  the  Canadian  de- 
mand, although  that  demand  has  mcreased  from  about 
20,000  tons  in  the  nineties  to  aljout  1,000,000  tons  to-day. 

This  remarkable  growth  has  been  caused  largely  by  the 
new  conditions  of  the  industry.  The  discovery  and  use  of 
Newfoundland  ores,  together  with  the  availability  of  Cape 
Breton  coal,  has  made  the  Nova  Scotia  industry  not  only 
possible  but  profitable.  The  discovery  of  the  Michipicoten 
ores  in  Ontario  stimulated  the  building  of  the  "Soo" 
Mills,  even  though  chief  use  has  been  made  of  American 
ores.  The  availability  of  capital  for  industrial,  as  well  as 
railway  enterprises,  the  increased  labor  supply,  and  eflBcient 
and  aggressive  management  were  additional  favorable 
conditions. 

The  years  1906  to  1914,  and  especially  1911  to  1914, 
have  been  a  period  of  o'-ganization  of  industry,  partly 
through  the  amalgamation  of  companies,  but  more  especi- 
ally through  the  rounding-out  of  the  plants  into  more 
eflBcient  establishments  producing  finished  as  well  as  pri- 
mary products.  In  this  regard  the  passing  of  the  bounty 
system  seems  to  have  been  of  more  importance  than  the 
original  granting  of  this  form  of  assistance.  That  a  hrge 
part  of  the  present  iron  and  steel  industry  would  have  jeen 
developed,  whether  or  not  protection  had  been  provided, 
has  been  quite  apparent.  The  fact  is  that  the  gradual  scal- 
ing down  and  final  disappearance  of  the  bounties  has  forced 
the  companies  to  put  their  enterprise  on  a  more  eflBcient 
basis.  One  may  fairly  question  whether  the  bounty  sys- 
tem has  not  even  postponed  the  adoption  of  modem  or- 
ganization of  the  iron  and  steel  industry.  At  all  events,  it 
is  quite  clear  that  recent  competition  from  without,  and, 
so  far  as  it  exists,  from  within,  the  country,  has  been  a 
dynamic  force  for  progress. 

In  recent  years  the  people  who  are  interested  in  the  pri- 


CONCLUSION 


811 


mary  industry  have  been  urging  that  the  present  policy 
favors  producers  of  finished  products  without  developing 
the  primary  industry.  The  reverse  is  the  case.  While  from 
80  to  90  per  cent  of  the  Canadian  consumption  of  pig  iron 
and  steel  billets  is  made  in  Canada,  only  about  65  per  cent 
of  the  consumption  of  iron  and  steel  of  all  kinds  is  supplied 
by  Canadian  mills.  Probably  not  more  than  55  to  60  per 
cent  of  the  demand  for  'ini:,h£  A  products  alone  is  satisfied 
by  the  output  of  Canadian  mills.    Undoubtedly  general 
industrial  growth  has  involved  a  large  demand  for  iron  and 
steel  products.   The  increase  of  railway  mileage  has  not 
only  widened  the  market  area,  but  has  also  added  to  the 
direct  demand  for  finished  iron  and  steel  goods  in  the  form 
of  railway  supplies.   The  growth  of  agriculture,  mining, 
and  manufacturing  has  created  an  extraordinary  demand 
for  machmery  of  all  kinds,  much  of  which  had  to  be  met  by 
importation.  The  lack  of  protection  was  partly  responsi- 
ble for  the  failure  to  develop  certain  branches  of  the  finish- 
ing industry,  while,  on  the  other  hand,  the  duties  on  the 
primary  products  were  a  burden  on  those  manufacturers 
who  did  manage  to  secure  a  hold  on  the  market.  Whether 
or  not  protection  was  responsible  for  the  growth  of  the 
finishmg  industry,  or  whether  or  not  higher  protection 
would  have  developed  the  industry  more  fully,  depends 
on  the  particular  conditiun;j  of  the  various  branches  of  the 
industry. 

§  2.  A  discussion  of  the  wisdom  of  the  protective  policy 
of  the  last  sixteen  years  includes  a  consideration  of  several 
things.  Some  of  these  we  have  already  discussed  and  the 
conclusions  need  only  be  summarized.  In  the  first  place, 
the  poUtical  necessity  for  the  reduction  of  the  tarifiF  duties 
on  the  primary  raw  materials  was  supplemented  by  the 
fact  that  there  was  a  sound  economic  reason  for  such  a 
reduction  of  protection.  The  justification  for  this  state- 
ment need  scarcely  be  repeated.   It  is  enough  to  say  that 


il 


TwrrrTW!"^ 


•rr^f 


nw 


m 


312    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

cheapness  of  raw  materials  is  as  important  to  mamifactur- 
ers  of  the  more  highly  finished  products  as  are  protective 
duties  on  those  finished  products;  and  a  reduction  of  duties 
on  primaiy  products  makes  possible  a  reduction  of  the 
duties  on  finished  products. 

For  this  reason  the  bounty  system  was  preferable  to 
duties  on  pig  iron  and  steel  billets.  Whereas  duties  would 
have  kept  up  the  price  of  iron  and  steel,  bounties  gave  as- 
sistance without  increasing  the  price.  It  is  surprising  that 
the  duties  were  not  entirely  superseded  by  bounties.  To 
the  extent  that  the  bounties  were  imnecessary,  the  sys- 
tem represented  an  uncompensated  cost  to  the  Canadian 
Government  and  to  the  Canadian  people  in  general. 

Assuming,  then,  that  the  policy  of  having  cheap  raw 
materials  for  the  production  of  the  finished  products, 
adopted  by  Mr.  Fielding  in  1896,  and  accepted  by  Mr. 
White,  the  new  Fi  ice  Minister  of  the  Conservative  Gov- 
ernment, was  p„!i  ily  and  economically  sound,  the  Brit- 
ish preference,  so  far  as  it  reduced  the  amount  of  protec- 
tion granted,  was  a  step  in  the  same  direction.  Likewise, 
the  drawback  system  and  the  exemption  from  duty  of  iron 
and  steel  for  use  in  the  manufacture  of  iron  and  steel  goods 
reveal  this  same  interest  in  cheap  raw  materials,  and,  not- 
withstanding the  criticism  of  those  interested  in  the  pri- 
mary industries,  there  is  little  expectation  that  iron  and 
steel  of  a  kind  not  made  in  Canada  will  be  subjected  to 
duties  so  long  as  the  manufacturing  consumers  have  such 
a  large  economic  and  political  influence.  A  rebate  of  duties 
paid  has  been  given  certain  manufacturers  whose  products 
have  received  little  or  do  protection;  as,  for  instance,  agri- 
cultural implements,  and  certain  kinds  of  wire.  These 
favors  have  apparently  been  necessary  in  Canada,  since 
producers  of  agricultural  implements  seem  to  bear  the 
burden  of  most  of  the  farmers'  criticism  of  high  protection. 
Drawbacks  of  the  duties  on  coal  and  coke  used  in  the  smelt- 
ing of  iron  have  favored  the  primary  industry  in  Ontario 


COr.CLUSION 


81S 


without  injuring  the  coal  industry  of  Nova  Scotia.  The 
admission  of  iron  ore  free  of  duty  was  a  similar  desirable 
benefit  to  the  primary  iron  and  steel  industry  in  Canada. 
The  dumping  clause  was  a  violation  of  this  principle. 
Had  it  succeeded  in  relieving  a  special  disadvantage  of  the 
Canadian  industry,  it  would  have  resulted  in  such  an  in- 
crease of  the  cost  of  producing  finished  products  in  Canada 
as  miatit  have  ruined  the  finishing  industry.  The  large 
producers  of  pig  iron  and  steel  billets  turn  a  great  part  of 
the  product  into  finished  goods  at  their  own  mills.  Al- 
though the  duties  on  such  raw  products  are  no  disadvan- 
tage to  these  finishing  mills,  they  may  be  a  serious  disad- 
vantage to  the  firms  which  produce  finished  products  alon  \ 
This  has  been  illustrated  ah-eady  by  reference  to  the  duties 
recently  imposed  on  wire  rods,  and  to  the  way  in  which 
duties  on  pig  iron  and  steel  billets  may  have  retarded  the 
production  of  finished  products  by  independent  firms. 
Accordingly,  industrial  combination  and  integration  of 
industry,  especially  in  recent  years,  make  the  case  even 
stronger  against  the  duties  that  have  been  maintained  or 
imposed  on  pig  iron,  steel  billets,  and  buch  other  primary 
or  intermediate  products  as  wire  rods. 

§  3.  What,  then,  should  the  future  policy  be?  Mr. 
White,  the  Fmance  Minister,  has  recently  declared  him- 
self opposed  to  high  protection  for  the  primary  products, 
since  he  believes  that  they  should  be  available  at  as  low 
a  price  as  possible.  A  minor  revision  was  undertaken  dur- 
ing the  last  session  of  Pariiament  (1914)  and  certain  duties 
were  increased.  Consequently  the  iron  and  steel  interests 
are  expectantly  awaiting  the  tariff  revision  which  is  likely 
to  follow  the  next  general  election. 

In  the  first  place,  the  dumping  clause  ought  to  be  abol- 
ished. If  it  could  be  proved  that  foreign  competition  were 
entirely  shut  out  by  the  dumping  clause,  and  that  the 
Canadian  prices  are  the  trust  price  plus  the  duties  and 


ik'.!.',v.Vi/  i. 


^n^^T^ 


"crv 


,»-.,- --UW-'-^,-' 


814    THE  CANADLVN  IRON  AND  STEEL  INDUSTRY 


transportation  charges,  no  politician,  and  certainly  no  fair* 
minded  Canadian,  would  favor  e  retention  of  the  dump- 
ing clause.  So  far  as  the  clause  is  violated  it  is  useless. 
Meanwhile  its  application  has  given  rise  to  endless  con- 
fusion and  uncertainty,  not  only  in  respect  to  facts,  but 
principles.  If  protection  is  needed,  it  should  be  given  in  a 
definite  form,  and  not  according  to  a  makeshift  policy  that 
is  no  protection,  l)ecause  its  application  is  never  determin- 
able. The  sooner  the  dumping  clause  is  removed  from  the 
statute  books  the  better. 

Secondly,  so  much  depends  on  the  availability  of  cheap 
raw  materials,  and  so  considerable  a  part  of  the  Cana- 
dian industry  is  built  on  the  use  of  foreign  ore,  that  a  duty 
on  the  importation  of  raw  materials,  iron  ore  and  coal,  for 
the  purpose  of  encouraging  the  use  of  Canadian  resources, 
should  not  be  imposed.  Further,  the  admission  of  New- 
foundland ore  free  of  duty  has  the  special  merit  of  being  a 
concession  to  a  sister  colony.  The  claim  that  the  Canadian 
iron  and  steel  industry  should  have  more  protection,  on 
the  ground  that  Canadian  resources  should  be  protected  in 
order  to  be  developed,  and  that  such  duties  on  raw  ma- 
terials would  necessitate  an  increase  in  favor  of  subsequent 
stages  of  manufacture,  is  a  proposition  that  cannot  find 
favor  with  either  the  iron  and  steel  industry  or  the  public. 
Besides,  a  scheme  of  this  kind  would  be  a  violation  of  those 
principles  of  conservation  which  have  but  recently  secured 
such  merited  recognition  in  Canadian  public  opinion. 

Thirdly,  the  duties  on  scrap  iron,  pig  iron,  steel  billets, 
bar  iron  and  steel,  wire  rods,  and  all  other  primary  and 
intermediate  iron  and  ste-1  products,  should  be  reduced. 
These  goods  should  be  admitted  free  of  duty  under  the 
British  preference.  A  small  duty,  equivalent  to  about  2j 
and  5  per  cent  ad  valorc  .mposod  under  the  mtermediate 
and  general  tariffs,  would  probably  protect  against  the 
dumping  of  American  products,  without  prohibiting  ab- 
solutely the  American  producers  from  selling  to  Canadian 


^-.^^  *(^ 


CONCLLSION 


S15 


firms  "duty  paid,"  or  without  increasing  the  cost  of  the 
raw  materials  of  the  independent  producers  of  fiLished 
goods  beyond  the  cost  to  those  producers  who  uai-  these 
primarj'  products  in  their  own  finishing  mills. 

This  reduction  of  protection  would  force  Canadian  pro- 
ducers of  pig  iron  and  steel  billets  to  extend  their  plants  and 
to  increase  tlie  scale  of  operations  in  order  to  reduce  costs, 
just  as  the  passing  of  the  bounties  led  to  the  erection  of  nail 
mills  at  Sydney.  There  is  little  r(;ison  to  suppose  that  an 
orgunization,  as  efficient  as  Mr.  riunim<  r  has  recently  de- 
clared the  Sydney  establishment  to  l)e,  would  not  be  able 
to  improve  its  plant  and  expand  its  business  to  meet  the 
importation  of  free  pig  iron  and  steel  billets. 

The  reduction  of  protection  on  the  raw  materials  would 
favor  the  finishing  industry  which,  as  a  whole,  is  (  -  more 
important  to-day  than  the  primary  industry.    L  ;d- 

ent  producers  of  finished  products  who  have  to  buy  uieir 
raw  materials  would  have  an  opportunity  to  produce 
under  conditions  almost  as  favorable  as  those  who  produce 
their  o vm  raw  materials  which  they  turn  into  finished  prod- 
ucts. Consequently,  the  smaller  firms  now  in  existence 
would  have  a  chance  to  develop  their  business  and  some 
new  plants  woidd  be  built.  At  11  events,  the  tariff  on  pri- 
mary products  would  no  longer  encourage  the  integration 
of  industry,  and  what  integration  would  take  place  would 
be  based  upon  natural  industrial  forces,  rather  than  arti- 
ficial conditions. 

So  far  as  this  study  shows,  protection  has  been  most 
successful  in  developing  the  finishing  industry.  If  it  were 
increased,  it  would  not  be  able  to  develop  all  branches  of 
the  industry,  and  it  would  be  too  costly  in  certam  fields. 
In  general,  at  the  present  time  the  protection  to  finished 
produ'Tts  mig*^*  be  reduced  if  the  duties  on  the  raw  mate- 
rials were  reduced.  In  special  branches  of  the  industry  pro- 
tection might  be  practically  abolished.  The  duties  on  steel 
rails  might  well  be  reduced  to  nothing  under  the  British 


1.1 


Ifl 


T-' 


Itii 


h 


S16    THE  CANADIAN  IRON  AND  STEEL  INDU   '^RY 

preference,  and  to  about  five  per  cent  under  the  get  .al  and 
intermediate  tariffs.  Plants  that  can  sell  at  a  profit  in 
India,  Great  Britain,  Mexico,  etc.,  even  in  years  of  depres- 
sion, scarcely  need  protection.  Possibly  Canadian  rail- 
roads would  then  be  able  to  complete  their  systems  without 
making  annual  pilgrimages  to  Ottawa  for  subsidies  that 
run  into  the  millions.  The  same  policy  might  also  be  fol- 
lowed in  the  small  hardware  lines,  and  m  such  other 
branches  of  the  indiistry  as  a  tariff  commission  or  com- 
mittee might  determine.  Other  portions  of  the  industry 
might  be  granted  higher  net  protection  for  a  few  years  of 
experimentation  or  imtil  Canadian  firms  could  get  a  grip 
on  the  market.  If  a  committee  undertook  this  work  care- 
fully, and  if  the  duties  were  reduced  when  the  industry  had 
received  the  necessary  stimulus,  the  consumers  of  finished 
products  might  benefit  in  the  long  run,  producers  of  fm- 
ished  products  certainly  would  gain  at  once,  and  producers 
of  the  primary  and  intermediate  products  would  soon  find 
that  they  could  use  an  increasmg  amount  of  their  raw 
materials  in  their  own  finishing  mills,  and  could  supply 
the  mcreasing  demand  for  such  primary  and  intermediate 

products. 

A  recent  development  in  steel-making  has  been  favoring 
a  new  Canadian  industry.  Just  as  the  extraordinary 
quality  of  the  Quebec  charcoal  iron  has  been  of  the  great- 
est importance  in  the  success  of  those  small  Quebec  fur- 
naces, so  the  production  of  special  kinds  of  steel  for  the 
manufacture  of  tools,  steel  rails,  and  high-speed  steels  may 
become  an  important  basis  for  progress  of  the  Canadian 
industry.  Dr.  Hcrault,  director  of  the  Electro  Metallurgi- 
cal Works  at  La  Piaz,  France,  said  tliat  by  1915  Canada 
would  be  a  great  metallurgical  country  and  that  in  time 
she  will  supply  the  world.  This  is  probably  the  over-en- 
thusiastic statement  of  a  technical  metallurgist,  for  under 
conditions  which  obtain  in  most  of  the  settled  regions  of 
the  world*  neither  pig  iron  nor  ordmary  steel  can  be  pro- 


i* 


CONCLUSION 


817 


duced  in  the  electric  furnace  at  a  cost  to  compete  with  the 
ordinary  fiunaces.    Under  exceptional  conditions,  where 
cheap  electric  power  can  be  obtamed  in  the  immediate 
vicinity  of  the  ore,  or  where  some  special  quality  of  pro- 
duct is  desired,  pig  iron  or  steel  can  be  produced  profitably 
by  electric  furnaces.   In  due  time,  when  fuel  supplies  be- 
come much  scarcer  than  at  present,  electric  smelting  may 
have  a  considerable  influence  on  the  general  development 
of  iron  and  steel  industries.^  MeanwhUe  there  is  some  rea- 
son why  Canada,  with  extraordinary  electric  power,  such 
as  is  obtainable  at  Sault  Ste.  Marie  and  many  other  places 
in  Ontario  and  Quebec,  should  continue  to  expand  this 
specialized  branch  of  the  iron  and  steel  industry  which  she 
has  aheady  begun.  When  electric  steel-making  on  a  large 
scale  becomes  economicaUy  possible,  the  future  of  the  iron 
fl  and  steel  industry  in  Canada  wUl  be  fuUy  assured,  by 

reason  of  Canada's  unsurpassed  water  power  and  her  re- 
serves of  iron  ore  of  unknown  extent  and  quality. 

§  4.  It  might  be  swd  that  if  pig  iron  and  steel  billets,  as 
weU  as  other  goods,  are  to  be  practicaUy  free,  it  would  be 
wise  to  renew  the  bounty  system.  This  b  impossible.  The 
bounty  system  was  introduced  because  it  would  give  protec- 
tion without  increasmg  the  price  of  the  products.  Duties 
would  have  cost  those  who  used  pig  iron  a  part  of  the  duty 
on  all  pig  iron  and  steel  billets  consumed.  Bounties  cost 
the  Government  a  definite  amount  only  on  that  part  of  the 
annual  consumption  which  was  supplied  by  home  pro- 
ducers. But  to-day  80  to  95  per  cent  of  the  total  consump- 
tion is  produced  in  Canada,  and  if  the  rate  of  boimty  were 
large  enough  to  give  real  assistance,  the  bounty  payments 
would  be  very  burdensome  to  the  Government. 

This  temporary  merit  of  the  bounty  system  suggests, 
then,  the  very  reason  why  a  bomity  system  is  no  longer 
expedient  or  desirable  in  Canada.   PoliticaUy,  it  b  unde- 
»  United  SUtes  Geological  Survey,  Report.  liKW.  pp.  100-01. 


■w^MiirwiL 


til 


818    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

sirable  because  there  b  a  growing  political  influence  in 
western  Canada  opposed  to  protection,  and  because  the 
iron  and  steel  interests  themselves  are  none  too  favorable 
to  the  bounty  system.  The  Liberals  provided  for  endmg 
bounty  payments  in  1910  to  1912,  and  the  Conservative 
Government,  though  avowedly  protective  m  its  policy, 
has  not  seen  vt  to  renew  these  favors  to  the  iron  and  steel 

industry.  ,  , 

This  political  objection  to  the  bounty  system  is  merely 
the  expression  of  more  fundamental  economic  conditions. 
Mr.  Fielding  claimed  that  the  bounties  had  been  entu^ly 
repaid  by  the  increase  in  customs  collections.   But,  un- 
fortunately for  the  bounty  system,  these  collections  have 
been  made  on  imports  of  an  entirely  different  character, 
purchased  by  other  manufacturing  interests,  by  the  min- 
eral, farmmg,  and  lumbering  mdustries.  and  by  the  general 
consuming  public,  includm,  the  laboring  class  itself.   In 
other  words,  the  prosperity  of  the  Canadian  iron  and  steel 
industry,  so  far  as  it  has  depended  on  bounties,  has  been 
an  actual  burden  on  other  industries  which  received  UtUe 
or  no  benefit  from  the  development  of  the  iron  and  steel 
industry.  H  it  can  be  shown  that  the  protective  system 
itseU  has  been  superfluous,  this  count  against  the  bounties 
is  conclusively  proved. 

This  criticism  of  the  Canadian  bounty  system  does  not 
apply  with  so  great  force  to  the  earlier  period  of  develop- 
ment when,  as  has  been  said,  a  much  smaller  amount  of 
bounties  was  paid.  But  according  to  the  foregoing  rea- 
soning, the  large  payments  of  bounties  m  recent  years  have 
been  an  injustice  of  considerable  importance  to  a  part  of 
the  community  which  derived  little  or  no  direct  benefit 
from  the  development  of  the  industry.  The  payment  of 
bounties  on  every  variety  of  iron  and  steel  production  is  an 
ob\nou3  impossibility  which  the  revisers  of  the  tariff  clearly 
recognized  in  1907  by  the  abolition  of  the  bounties  on  the 
production  of  angles,  tecs,  shapes,  etc.  Not  only  the  variety 


Hi, 


CONCLUSION 


81» 


but  also  the  volume  of  such  production  entirely  prohibits 
such  an  application  of  the  system.  The  actual  cost  in 
bounty  payments  would  be  altogether  too  large  and  the 
injustice  to  that  part  of  the  public  that  paid  revenue  duties 
on  other  goods  would  be  obvious.  That  the  iron  and  steel 
industry  only  should  benefit  is  something  which  no  fair- 
minded  statesman  or  economist  could  support. 

§  5.  Unfortunately  the  application  of  a  protective  policy 
is  seldom  determined  on  ultimate  economic  grounds.  Un- 
due recognition  has  been  given  to  political  interests.  Ca- 
nadian experience  shows  that  the  protective  policy,  as  it 
usually  works  out,  is  a  question  of  expediency  rather  than 
of  principle.  Fortunately  enough,  it  has  been  not  only 
economically  but  also  politically  expedient  for  the  Canr- 
dian  Government  to  reduce  the  total  amount  of  protec- 
tion granted  the  iron  and  steel  industry  in  recent  years. 
The  fact  that  the  operations  of  a  protective  policy  bear  the 
marks  of  expediency  appears  also  in  the  illogical  and  in- 
consistent way  m  which  it  has  been  applied. 

Of  recent  years  there  has  been  some  leaning  toward  a 
theoretical  justification  for  the  doctrine  of  protection, 
through  the  quite  general  adoption  of  the  infant  industry 
argument,  or  the  dynamic  theory  of  protection.  American 
political  parties  were  for  a  brief  moment  agreed  on  the 
ado-  •  '♦f  a  so-called  "  cost  of  production "  basis  of  pro- 
tet.  .'rotection,  however,  is  I'l-equently  granted  to 

md  .  "  where  the  infant  industrv  argument  does  not 
app.j  v-^cause  the  conditions  for  development  do  not  exist, 
or  because  the  burden  of  protection  b  too  great.  It  has 
been  common  for  the  Canadian  Government  to  grant  pro- 
tection because  articles  were  already  made  in  the  country 
in  considerable  quantities,  or  because  there  was  evidence 
that  mills  would  shortly  be  in  operation.  The  general 
tendency  is  for  the  Government  to  accept  uncritically  the 
application  of  the  infant  industry  argument  to  practically 


li 


1^1 


ill: 


320    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

every  industry  that  has  suflScient  political  dominance  to 
claim  support.  The  industry  that  would  have  protection 
should  prove,  first,  that  conditions  are  ripe  for  the  appli- 
cation of  that  i)olicy;  second,  that  the  general  welfare  of 
the  country  would  be  advanced  in  this  way;  and  third, 
that  the  industry  could  not  make  satisfactory  headway 
without  protection,  or  that  the  favorable  conditions  would 
not  themselves  develop  a  satisfactory  industry. 

Along  with  the  acceptance  of  the  infant  industry  argu- 
ment has  gone  a  demand  for  the  reduction  of  protection  as 
the  ability  of  an  industry  to  compete  was  increased.  The 
principle  has  appeared  in  the  scheme  of  gradually  reducing 
the  bounties  as  the  industry  became  solidly  established. 
This  feature  of  the  bounty  system  was  most  creditable, 
because  in  the  stages  of  its  application  the  large  payments 
required  made  it  impossible  to  renew  the  system.  Thus  the 
application  of  protection  to  the  Canadian  iron  and  steel 
industry  has  merited  less  criticism  than  its  application  to 
many  other  industries  or  in  many  other  countries. 

The  unqualified  "cost  of  production"  theory  of  protec- 
tion has  never  been  accepted  in  Canada.  For  this  reason 
anthracite  coal  and  coke  are  admitted  into  Canada  free  of 
duty  and  bituminous  coal  used  for  smelting  purposes  is 
admitted  subject  to  a  drawback  of  99  per  cent  of  the  duty 

paid. 

There  is  a  danger  that  protection  as  a  permanent  policy 
may  be  adopted.  Recently  the  iron  and  steel  people  have 
urged  that  protection  should  be  incre:  sed.  This  claim  is 
based  on  an  alleged  understanding  that  when  the  bounties 
disai)pcared  comj)cnsator}'  protection  in  the  form  of  duties 
would  be  given.  The  political  change  which  put  the  tradi- 
tionally protectionist  party,  the  Conservatives,  in  power, 
has  given  the  manufuclurers  the  courage  to  ask  for  pro- 
tection, wherejis  undo,  the  Liberal  regime  they  were  con- 
tent to  let  the  bounties  pass  away  and  to  make  the  best  of 
it  by  introducing  iulciuai  economuj. 


CONCLUSION 


321 


Some  have  thought,  too,  that  protection  was  granted  to 
all  interests.  As  a  matter  of  fact,  protection  universally 
applied  to  all  articles  and  stages  of  manufacture  produces 
a  situation  in  which  the  profits  of  one  stage  eat  up  the  pro- 
fits of  the  next.  If  the  producers  of  iron  ore  secure  protec- 
tion in  their  favor,  the  blast  furnacr  people  must  be  given 
favorable  duties  to  offset  the  increase  in  cost  of  production 
of  pig  iron.  Likewise,  the  duties  on  pig  iron  eat  up  the 
special  profits  that  accrue  to  steel-making  by  reason  of  the 
duties  on  steel  billets;  and  so  on  down  the  list.  The  high 
prices  obtained  for  protected  articles  are  offset  by  the  high 
cost  of  raw  materials  and  by  the  high  price  of  articles  pur- 
chased for  lilt  "mate  consumption.  In  other  words,  a  con- 
sistent application  of  protective  duties  to  all  industries,  by 
which  one  industry  is  as  much  favored  as  another,  is  of 
little  value,  because  protection  to  one  stage  of  the  industry 
neutralizes  that  given  to  the  next  stage  in  the  same  indus- 
try, to  say  nothing  of  its  effect  on  other  industries. 

Hence  it  is  that  the  only  method  of  making  protection 
effective  is  to  grant  it  to  some  stages  of  an  industry,  or  to 
certain  industries,  or  to  permit  certain  industries  to  form 
monopolies  while  others  find  it  impossible  effectively  to 
combine.  In  short,  not  all  the  country  can  benefit  from 
protection,  and  what  is  the  profit  of  one  industry  becomes 
the  burden  of  another.  Meanwhile  this  illogical  applica- 
tion of  protection  gives  rise  to  endless  discussions  of  in- 
justice, and  the  balancing  of  jwlitical  influence,  supported 
by  already  developed  industries,  decides  what  the  com- 
mercial policy  shall  be,  although  it  is  the  economic  condi- 
tions that  determine  in  a  large  measure  the  course  of  in- 
dustrial development. 

§  6.  This  leads  us  again  to  the  old  and  well-known  prin- 
ciple of  the  plurality  of  causes.  This  study  is  a  protest 
against  the  common  error  of  regarding  events  ^^  the  out- 
come of  a  single  factor.  Just  as  an  industry  is  complex,  so 


:■:-  m.\ 


S22    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

too  the  causes  operating  in  favor  of  or  against  the  iudu?). 
try  are  many  and  diverse.  Some  changes  are  adverse  ana 
some  give  assistance;  some  prohibit  development  and 
some  make  an  expansion  of  industry  possible.  But  if  the 
effect  of  protection  cannot  be  precisely  determined,  it  is 
hoped  that  this  study  has  at  least  made  it  apparent  that  a 
great  number  of  causes  have  been  at  work,  and  it  is  sug- 
gested that  the  broader  understanding  of  the  forces  under- 
lying economic  development  in  many  spheres  would  give 
a  basis  for  more  informed,  and,  therefore,  much  wiser  and 
more  applicable,  legislation. 

Finally,  it  should  be  noted  that  these  causes  for  economic 
movements  are  a  network  of  influences  interwoven  in  dif- 
ferent directions  and  in  different  ways.  General  Canadian 
industrial  development  has  built  up  an  increasing  market 
for  iron  and  steel.  It  has  called  for  the  building  of  railways 
which  has  always  resulted  in  an  increase  in  the  Canadian 
iron  and  steel  industry.  It  has  resulted  in  the  discovery  of 
ores  of  considerable  importance,  and  it  has  found  the  labor 
supply  and  the  capital  necessary  for  large  industrial  un- 
dertakings.   These  minor  phases  of  Canadian  develop- 
ment are  themselves  interrelated.   The  whole  prowss  of 
Canadian  economic  organization  goes  far  to  explain  the 
recent  development  of  the  iron  and  steel  industry.  Mean- 
whUe  the  fact  that  the  industry  is  so  intimately  con- 
nected with  every  phase  of  Canadian  economic  life  sug- 
gests the  conditions  of  success,  and  demands  that  a  wise 
commercial  policy  in  respect  to  iron  and  steel  shall  not 
retard  any  phase  of  that  Canadian  future  which  seems  so 
promising. 


THE  END 


I- 

ill 


Ill 


THE  STATISTICAL  PROGRESS  OF  CANADA » 


Yr*r  eodinc 
June  90 


Estimated 

population 

July  I  « 


Bailway  milraffe 


1851 «.884,409 

1861 8.171,418 

1868. 
1869. 

1871 8,889,x87 

187*. 
187S. 
1874. 
187S. 
1876. 
1877. 
1878. 
1870. 
1B80 

iMi'.'.v.v.v.:;;:.!  4.s*4.8io 

188«. 
1883. 
1884. 
1881. 
1886. 
1887. 
1888. 
188S. 

ilS?::::::.::::::.  4.8ss.«s9 

1894. 
1893. 
1894. 
189S. 
1896. 
1897. 
1898. 
1899. 

1900 

1901 «,S71,3W 

1902. 
1903. 
1904. 
1909. 
1906. 
1907. 
1908. 
1909. 

mi::.::::/./.'.;;  7.W4.888 

191«. 
1913. 
1914. 


In  oper- 
ation 

ISO 
«.146 
«,«70 
«.Si4 
«,«17 
«,695 
i.8»9 
3,83« 
4,331 
4,804 
5.il8 
8,78< 
e,iM 
6,858 
7,194 
7,331 
8,'J97 
9,S77 
10,473 
10,773 
11,793 
14.184 
14,584 
14,485 
13,151 
13.838 
14,564 
15,005 
15,647 
15,977 
18.470 
16.650 
16.870 
17.450 
17.657 
18.140 
18.714 
18.988 
19.431 
40.487 
41.353 
44.454 
44.966 
44,104 
44.731 
43,400 
48.747 
49.304 


Yearly 
increaae 


446 
93 
78 

404 

033 

499 

473 

414 

664 

444 

894 

336 
137 
1.366 
880 
606 
600 
1.040 
391 
401 

688 

687 

746 

441 

644 

860 

449 

480 

840 

380 

407 

483 

674 

474 

443 

1,066 

866 

1.090 

614 

1,138 

647 

689 

1.347 

4,677 


Gross 
Uabilitit-a  of 
commercial 

failures 


16.454,546 
14,334,104 
7,698,766 
48.843,967 
45,517,091 
46,643,903 
43,908.677 
40.347.937 
7.988.077 
6,751.407 
8,587.667 
16,311,744 
16.094.361 
19.191.306 
8,861.809 
10,386.884 
14.081  160 
14.713.446 
18.489.936 
17.100.649 
13.736.191 
14,889,794 
17.616.415 
15,804,989 
17,189.883 
14,157.498 
9.841,343 
10.668,875 
11,613,408 
10,811,871 
10,934,777 
7,554,744 
11.394,117 
9.864,669 
9,086,773 
13,441,469 
14.031.790 
14,984,800 
14,514,850 
I3.4C1.198 
14,318,937 
18,979,406 


Imports  and 
export*,  total 


1 131,047,534 
130.880,946 
148,387,840 
170,466  JMD 
194,070,190 
417,801,408 
417,665,610 
800,967,484 
174.176,781 
176,403,865 
174,406,464 
153,466,683 
174.401,405 
403,641,608 
441,666,708 
430,330,848 
407,803,680 
108,179,847 
189,875.875 
404.408.047 
401.097.630 
404.414.008 
418,607.300 
418,384.934 
441.369,448 
447.838,840 
440,000,880 
444,440,485 
430,046.860 
<67,168,80a 
804,476,78a 
341,661,418 
881,617,485 
886.003,167 
443,910,444, 
467.064.685' 
474.733.088 
470.161.480 
660.874.045 
466,083,404 
660,793.131 
871.468.767 
693.411.441 
769.443.905 
874,637,794 
1,086,434.449 
1.149,744.744« 


PotUical  Economy,  vol.  xxi.  p.  306. 
>  Canada  Krar  Book.  1913,  p.  447. 


r : 


m 


386 


APPENDIX 


B 

THE  PRODUCTION  OF  IRON  AND  STEEL 
IN  CANADA 


Table  I 

Pig  iron  produced  in  Canada,  upon  which  bounty  has  been  paid  by 
the  Federal  Government ;  pig  iron,  kentledge,  and  scrap  iron  Jot 
home  consumption  imported  into  Canada ; '  the  total  consump- 
tion of  pig  iron  in  Canada,  and  the  percentage  of  Canadian  pro- 
duction to  Canadian  consumption  '  since  18S3 


Pig  iron 

production  in  Canada        | 

nil 

Fiscal 

From 
ore 

From 

foreign 

ore 

Total 

(tons) 

Imports 

(tons) 

Total 

consumption 

(tons) 

(tons) 

(tons) 

£ua.8 

1884 

«9,5gs 



29,593 

52,184 

81,777 

36.2 

1885 

85,770 

— 

25,770 

43,398 

60,168 

37.S 

1886 

20,180 

— 

26,180 

45,648 

71,828 

36.5 

1887 

89.717 

— 

39,717 

50,214 

89,931 

44.9 

1888 

««,'i09 

— 

22.209 

48,973 

71,182 

91.1 

1880 

i4,8«S 

— 

24.823 

72,115 

96,938 

25.0 

1890 

25,697 

— 

25.697 

87,613 

113,310 

23.5 

1891 

20,I5S 

— 

20,153 

81,317 

101,470 

20.0 

18M 

30,294 

— 

30,294 

68,918 

99,212 

80.  i 

1899 

46,948 

— 

46,948 

63,522 

110,470 

42.S 

1894 

62,522 

— 

62.522 

45,790 

108,312 

67.7 

1895 

81,692 

85,000* 

66.692 

35,060 

101,752* 

65.2 

1896 

52,052 

25,000* 

77.052 

87,141 

114,193* 

67.5 

1897 

33,254 

35.000* 

68.254 

28,940 

97,194* 

70,0 

1898 

19,576 

5S.463 

73,039 

40.995 

114,035 

63.1 

1899 

31,861 

46.594 

78,047 

48.594 

126,641 

61.6 

1900 

34,618 

67,221 

101,839 

65,330 

107,169 

60.0 

1901 

99,758 

60,581 

150,339 

40.282 

190.621 

78.0 

190« 

73,101 

268.553 

341.651 

43,064 

384.718 

88.8 

1003 

46,450 

274,741 

321.191 

99.814 

421,005 

76.8 

1904 

46,445 

2-:a,98U 

273,434 

73.900 

347.334 

78.8 

1905 

59,452 

827,267 

386,719 

77.538 

464.527 

83.3 

1906 

86.523 

495.335 

581.858 

101.663 

683.521 

85.1 

1907 

67,«»» 

349.041 

416.265 

231.041 

647.677 

64.5 

1908 

108.359 

578,421 

686.780 

238.661 

925.441 

74.2 

1909 

97,828 

511.605 

609.431 

73.781 

683.212 

88.0 

1910 

129,684 

610.560 

74(1,244 

172.127 

912.371 

81.0 

1911 

52,893 

534.676 

487,469 

290.324 

878.093 

66.0 

191U 

— 

— 

907,535 

208,487 

1,120.152 

82.8 

191*' 

— 

— 

1,014,587 

212,565 

1,280,176 

79.0 

1919« 

— 

— 

1,128.967 

— 

— 

— 

E  f 


'  Canada  Year  Boot.  1911,  p.  426.  '  Estimated. 

•  Endinir  June  .SO.  until  1907;  March  31.  thereafter. 

•  Estimated  from  Table  IV.  No  bounty  paid  thereon.  The  Nova  Scotia  Steel  Company 
was  using  Newfoundland  ore  in  1895. 

>  Calendar  years;  Canada,  Report  on  the  Production  of  Iron  and  Sleel  in  Canada,  1012. 
p.  6. 

•  Canada.  Pnlminary  Report  on  Uineral  Produetion  in  Canada,  1913,  p.  6. 


I! 


APPENDIX 


S27 


THE  PRODUCTION  OF  IRON  AND  STEEL 
IN  CANADA 


Table  II 


Annual  production  of  pig  iron  by  Promncet,  rinee 


1886 


Calcwlw  Year 


188T. 

1888... 

188».. 

IBM.. 

1891 . . 

I8M.. 

18»S.. 

18Bt.. 

189S.. 

18M.. 

1897.. 

1898.. 

1899.. 

1900.. 

1901.. 

1904.. 

190S.. 

1904.. 

190S. 

1906. 

1907. 

1908. 

1909. 

1910. 

ion. 

l91t. 


No"»  Scoti» 
(toiu) 


19,S«0 
17,556 
«1,«H9 
18,^4 
«1.SAS 
40,049 
46,474 
41,»44 
89,104 
S4,3A1 
44,500 
41,847 
81,100 
48,133 
151.130 
437,444 
401,446 
164,488 
261,014 
315,008 
366,456 
354,644 
845,380 
850,487 
300,444 
444.994 


OnUrio 

(tuni) 


48.304 
46.115 
48,453 
64,749 
64,387 
118.371 
114,888 
87.004 
147.843 
456,704 
475,558 
475,459 
471,484 
407,014 
447,473 
146.635 
689.593 


Qucbrc 

(tons) 


5.507 
4.443 
4.634 
3.390 
4,538 
4,304 
9.475 
8.643 
7.484 
6.815 
9.394 
7.135 
7.094 
6.055 
6.875 
7,970 
9,635 
11,141 
7,588 
7,845 
10,047 
6,709 
4.770 
8.4S7 
658 


ToUl 

(tODt) 


44.947 
41.799 
45.941 
41.774 
43,891 
44.443 
55.947 
49.967 
44.454 
67.468 
58.007 
77.015 
104.943 
96,575 
474,376 
357.904 
497.885 
803.454 
545.306 
998.411 
651.964 
630.8.S9 
757.164 
800.797 
917.535 
1,014,587 


C»n«la.  Report  m  the  Production  of  Iron  and  SUcl  in  Canada.  1014.  p.  U. 


APPENDIX 


THE  PRODLCTK    >   OV  IRON  AND  Sl-EEL 
IN  C.VN^VDA 


Table  III 

Production  of  it  on  i  .   hy  I'  orineet,  aince  /S'S5  ' 


CaUodar  ytu 

New 

Bruiuwirli 

ItoDn) 

No.v.       ' 

~l 
4<,3HH 

4.':.d>t< 

tt  lot 
4('.    18 
S».t>49 
7H.<48 

89,379 
83,79« 
Stt.810 

n>,079 
«<,000 
18,940 
IH,A19 
16,17* 
40.334 
I.W3 
-iJ.IIA* 

H9,838 
11,80* 

18,134 
«* 

S0,SS7 

1886 

1  1!  1  1  1  1  1  1  1  1  1  1  1  1  1  1  1  1  1  1  M  1  III 

1887 

1888 

1880 

1880 

1881 

188t 

188S 

1804 

1MB 

1888 

1897 

1888 

IMM 

1900 

1901 

1804 

190S 

1904 

1904 

1900 

1907 

1908 

1908 

1910    ... 

1911 

19U     

Of 


.    I 

U,43^ 

u.  ■•  t) 

'.!.!".>■< 

ii.OTH 

1».49< 

17.78.1 

17.830 

«.4S8 

17. '473 

19.1*0 

19.000 

I.V«H9 

IK    U 

U.M5 

1«,1.?< 

I*,6MI 

9.»;<i 

l«.7»H 

10,lii:l 

4,150 

4.50.'< 

S.flir, 

1,185 


OntMriti 

ituoa) 


h;,  t3* 
HI.  ■* 
Ifl.   (4 


1'.,-;    I) 

"0 

111 

■  .\i9 

i<,950 
«7<,5:t8 
359.*H8 
WO.fl.'U 
14!  ';i)l 
193. 4«4 
141,1  "•< 
*07,; 
«l«,t 
J8.S.S93 
231,445 

IK.i*! 


HntHh     I     Til 

folumliia        '"'", 

(t„i.,)  **"'"' 


:(.!»4l 

H.;17* 
16,41i7 

950 
'^..300 
1,3*3 
1,1*0 
!,*<* 

196 
■,099 

*80 

i,07l 

1,111) 

7.0''X) 

10.1. 9 


t,sou 


64,301 

7fl.SS0 

78,587 

H4,181 

78,511 

68.878 

10S.148 

1*5,80* 

109.991 

10*.7»7 

9l,mi« 

M).7M 

«.343 

:4,(n7 

ii,(X>0 

:il3.84<; 

404,003 

*(;4,*49 

«lA.04a 

■'i.lWT 

i  IH.H.11 

.f  li,S4« 

*3H,08li 

«AH,049 

JS9,4I8 

;  10,344 

*15,88S 


■  Canada,  Btport  on  the  Produetion  q/  Iron  and  SUel   i  Canada,  181*.  p.  d. 


^mt 


■■■■ 


APPENDIX 


m9 


THE        ODI'CTION  OF  IRi)N  AND  STEEL 
!N  CAWDA 


Iron  ore.  andj     ■  rhuryed  to/  maa^^  since  1   'i6 » 


Irti'i  Of 


CaXcu 


IMh 

I88M           

l«»i)             .    • 

189<l 

18B1 

. . 

law. 

1803 

18S4.. 

1805.. 

1886.. 

18B7.. 

1H98.. 

)-W.. 

laaO.. 

Iv'i 

il» 

19< 

19> 

W 

Itx- 

W  '. 

1»=S. 

I**.. 

IH'O,. 

l»il.. 

ii)U 

1  r« 

I.  Btp' 

«u 

.  tot  t 

tnsdw 
toiu! 


>m,4S4 
'4,BA6 
.5.670 

-.3<>'- 
BS.) 
IM8 

■>SS 
971 

.,5«0 
.088 

H81 
■fl 
Ut 

.1161 


i; 
1' 

hi.OSS 
18«,91'* 

iie.ir 
m 


mpori 


JU 

;m 

,107 

W,650 

\  MM* 

•M.I)  10 

l.SHl 

4^j,l>ll 

4M.«71 

861.H47 

»8*,7*0 

1,117.<80 

1.081.VM 

!,«•'  ■  IKW 

l,.s       i»5 

l.c        '« 

8,0         »« 


-heU 


j6.60<i 
)31,80i) 

1,9*8.0^:. 
1,71)9,787 
1,8SS.7S8 
«,146,6!i3 
«,»*4,0»0 
8,477,470 
4,404,Syt 
2,168,476 
l,S8t,08S 
1.H1.BM 
1.771»,M8 
l,iilS,S19 
1,060.459 
1.886,748 


Coke 


(mm 


8S.581 

SO.MS 

89.8SS 

S4.07- 

•<*.79 

Sifi 

ea.s.' 
eco* 

5I.6«K 

00,067 

SA.800 

S1.9Ai 

44.844 

45.011 

«07,8Sa 

S«i.<OH 

SAO,l»U 

aj7,iM 

S6J,Stf7 
4«<,87* 
5il,068 
4l.'..a76 
4H.016 
49l.«81 
M3.98S 
609.183 


Import'd 

(tou) 


38.990 
27.810 
M,40T 
64,648 
S9,S4i 
115.367 
1U.3U 
96.540 
1S0,<10 
243,882 
804,676 
827.08« 
825.670 
507,255 
467.850 
677.388 
658.815 


i 


inrril  Pr     Mtim  in  Canada,  XtU   p.  Sr 
,i,  yea;i  a  ^    iiU  quMtity  of  coal.  •  I 


% 


Eitiaute'' 


!:' 


m 


m 


H 


880  APPENDIX 

THE  PRODUCTION  OF  IRON  AND  STEEL 
IN  CANADA 

Table  V 

Production  of  pig  iron  in  Great  Britain,  the  United  States,  and  the 
total  world  produrtion  ' 


Calendar  year 

Great  Britain 

United  SUtea 

World 

1500 

6.000 

17,000 

«58.i06 

368.000 

678,417 

l.«48,871 

8,300,000 

3.8<6.75« 

4.818.234 

5,983,515 

6,365.48< 

7,749,«33 

7.<97,«05 

7,875,130 

7,703,439 

8,959,891 

9,808,086 

10,000,000 

4J,000 

110,000 

165,000 

315,000 

564,755 

8«1,<«S 

831,770 

1,665,178 

«,0«3,73S 

3,835,  i91 

4.044,5M 

0,808,709 

9,446,309 

13,734,860 

88,998,380 

87.898.545 

1700 

1O4.C0O 

460.000 

1.010,000 

1.585.000 

8.680,000 

4.488.000 

7,180,000 

9,898,000 

11,616,000 

13,708,000 

18,854,885 

89,479.887 

87,194,804 

89,385,859 

80,537,076 

53.801,008 

64,000.000 

1806 

1810 

1830 

1840 

1850 

1860 

1865 

1870 

1875 

1880 

1885 

1890 

1895 

1900 

1905 

1910 

>  Chiiitopber  Wood.  Iron  and  Stttl,  Thiit  Produdim  arid  Mamijucttui,  p.  144. 


Hi 

r 


iiHiii 


mmm 


APPENDIX 


881 


THE  PRODUCTION  OF  IRON  AND  STEEL 
IN  CANADA 

Table  VI 

The  produdion  qf  steel  ingoU  and  castings  in  calendar  years,  and 
the  imports  of  steel  ingots  and  bilUts  in  fiscal  years  * 

ImporU '  (ton*) 


Yeu 


1804.. 

18»5.. 

1896.. 

1897. 

1898. 

1890. 

1900. 

1901. 

1002. 

190S. 

1904. 

1005. 

1006. 

1007. 

1008. 

1000. 

1910. 

1011. 

iei«. 

lOlS. 


Product '  (toM) 


88,767 

19.040 

17,980 

80,608 

84,185 

84,640 

86,406 

89,818 

803,881 

803,896 

166,381 

451,863 

639,306 

706,088 

588,763 

754,710 

888,884 

888,306 

057.681 


4.847 
18,757 
11.609 
80.608 
10.605 
10.017 
15.801 
88.507 
19,150 
16.888 

8,887 
36,814 
48,395 
88.075 
00.557 


1  Cu^Z  /Ujort  0^  the  DepartmtU  t^  Trade  and  Commmt,  1919.  p.  «S4. 


4    I 


¥  I 


SS2 


APPENDIX 


1 


00 


:3 


1 


J  ^ 

e 
o 

I 


a 
S 


•a 
> 


X 


•a 


sssssssg 
2"  5  *■  •    I  *  *■ 


2  8  = 


s  i  i  i  I  g  i;  s 

«    <o    *-t    •^  F- 


o   o     I    o   o   3»   to 

i  s  '  a  3  8  R 


r*   F«   ^ 


s:: 


8  3   I 


3 


S  a.  i  ?  i  I 

SCI  I   ^  S'  2  Sf 

o.  R  -       « 

8* 


82 


00   n 


I  I  I 


1 


«   S  -2 


P       C      M      C 

•5  h  •<  m 


Hfi 


•c 


'till  91/ 


I' 


APPENDIX 


3S3 


Mi 


THE  OCTPXJT  OF  IRON  AND  STEEL  PBODUCTS 
IN  CENSUS  YEARS 

Table  n 

Number  of  establishmenta  emploving  five  emphyees  or  more,  valiu 
of  the  capital  invested,  amourd  qf  salaries  and  wages  and  values 
oj  the  products,  together  vrUh  percentage  increases  for  decennial 
years,  1891-1911  » 


1891 


Establishments 

Value  of  capital  invested.  . . 
Percentage   of  decennial   in 

crease 

Percentage  of  increase  1891- 

1911 


Salanes  and  wages. .....  • 

Percentage  of  decenmal  in- 

crcftsc 

Percentage  of  increase  1891 

1911 


Values  of  products .  .    ■  • 

Percentage  of  decennial  in- 
crease  

Percentage  of  increase  1891- 
1911 


520 
$26,412,310 


$8,386,388 


$28,535,789 


1901 


517 

$40,861,164 

54.71 

$11,782,720 
40.50 

$34,878,402 
22.23 


1011 


824 
$123,561,319 
202.39 
367.82 
$31,219,864 
1C4.96 
272.27 
$113,640,610 
225.82 
298.24 


i 


!         1 


d 


>l  1] 


I  Fifth  Cenim  at  C«n»d..  BuUetin  no.  1,  MaimfaHunt  of  CoMda. 


m 


«b. 


884 


APPENDIX 

D 


RATE"^  OF  BOUNTY  IN  DOLLARS  PER  TON  ON 
VARIOUS  IRON  AND  STEEL  PRODUCTS  BY 
CLASSES  AND  BY  YE.UIS  — 1884-1912 


Pi|t  Iron  mule 

1 

Puddled 
bvf 

8tMl  blllctt 
udiscoU 

Rolled 

lound 

wire 

lode 

From  n«tiT«  or« 

Krom 

foreign 

on 

Cerula 

Y«r 

utaal 
pro««M 

•Icctric 
proccM 

M*dcb7 
electric 
proceM 

fectnree 
of  Keel 

1884 

$1.50'« 
1.50 
1.50 
1.50»« 
1.50 
1.50 
1.00» 
1.00 
1.00 
8.00* 
8.00 
8.00«* 
8.00 
8.00 
3.00«/« 
S.OO 
S.OOV 
3.00 
3.00 
8.70« 
8.70" 
8.85 
1.65 
8.10»» 
8.10 
1.70 
.90 

»8.10" 

i.l0 

1.70 

.90 

|8.00»» 
8.00 
8.00 
8.00 
8.00 
1.80  > 
l.BO'l 
1.50 
1.10 
l.W 
1.10 
.70 
.40 

|8.00« 
8.00 
8.00 
3.0O* 
3.00 
8.00« 
3.00 
3.00 
8.70V 
8.70" 
8.85 
1.65 
1.65«' 
1.65 
1.05 
.60 

8.00»« 
8.00 
8.00 
3  00»< 
8.00 
3.00" 
3.00 
3.00 
8.70« 
8.70" 
8.85 
1.65 
1.65W 
1.65 
1.05 
.65 

•1.65  •»■ 

1.65 

1.05 

.65 

•6.00'-" 
6.00 
6.00 
6.00* 
6.00 
6.00 
6.00 
6.00" 



1885 

— 

1886 

1887 

„ 

1888 

— 

1880 

— 

1800 

— 

1891 

— 

1888 

— 

1893 

-~ 

1894 

— 

1895 

~-' 

1896 

— 

1897 

— . 

1898 

1899 

^~ 

1900 

— 

1901 

— 

1B08 

— 

1003        

— 

1904 

•S.OO'— 

1905 

3.00 

1906 

S.0O 

1907* 

1908 

z 

1909 

— 

1910 

— 

1911 

1918 

— 

•  Klecel  Te«r  fnilnir  June  in  until  l!ir>7.    Calender  ,Te«r  iMclnnlnt  April  «1.  WOT. 

<  4.1  Vic,  IHfti, .  hep,  U.  a.  » 1. VI  for  »  period  nf  three  reere  end  »I1  for  three  eccceedlng  jmn. 
«  4»Vic., !»«.  ,hep  ■'W.         h.  tL.viiin'il  IWnii  $1  there«fter  until  IWS- 

»  .W  Vic.  IfWl,  chep.  «.  r.  »J,  IHW  to  IXBT. 

•  <7-.W  Vic.  1W4.  eWo.  <*.  l«Htol«». 

r.  When  mede  tn  Cenede  from  Canedien  pi)t  msde  from  Cuedltn  ore. 

•  f»14«  Vic,  l»7.  chep.  (t.  ^  .  ,  „       j, 
/.  Appliceble  to  ell  pie  iron  mede  In  Cenede  in  proportion  to  the  pereentue  of  Ceoadiea 

ore  newi:  a-  1*7  to  IfW.        *.  In  proportion  to  forrirn,  includlnn  Nrwfonndlend  ore  need, 

i.  Steel  to  inclnde  eteel  Incote  mennfednrrd  in  Caaede  from  Ingredicuia  at  which  not  lee* 
then  SB  per  cent  eoneiete  of  pig  Iron  mede  in  Cenede. 

•  arm  Vie.,  iHeu,  chep.  R.  ^  .  .      ,  „         .  ^,^  ,„» 

J.  All  reteetodeereMe  from  thertteeeet  forth  In  the  IWecheduleee  follow!  !ArTlU».lsnt, 
to  June  sn,  !9M,  m  Fwr  cent  i  IWH.  7\  per  cent  i  Vm,  a  ner  'ent ;  IHW,  .Id  per  rent  i  UOT,  M  per  cent 
4-.  No  hanntjrto  he  paid  on  injiota  made  from  puddled  here  made  In  Canada. 

/.  The  IW*  law  waa  amended  to  read:  108-04,  W  per  cent  i  lans,  'i  p«r  cent  i  190R,  U  per  cant  i 

'm.  /irlTclee  pitiduced  from  Meel  produced  In  Canada  from  iBfradlenta  of  which  not  lee* 
than.lOpercent  of  welitht  con»i«t«of  pig  iron  medeinCenada.  ,.  .       . 

n.  Rolled  ronnd  wire  roda  lew  then  ihri  p  quarter*  Inch  in  diameter,  when  aold  to  wire 
mannfacturere  for  nee  in  their  own  fectorio  in  Canada  In  makinr  wire.  ^_  , , 

o.  On  rolled  aBClea.  teee.  ehaanele.  beame,  )oie»a,  «irdere  or  hrid«»-hnildlng  or  rtnirtnral 
aeetione,  and  other  rolled  ehapei,  not  ronnd,  o»«l,  xinare.  Hat,  weighltuj  not  leee  than  Mponnda 
per  yard,  and  aluo  on  Set  ere  her  hlankt  when  «oM  for  rotmimption  in  Canada. 

V.  On  rolled  pletee  not  Icne  than  ■«>  Inohee  In  width  nor  Ireathan  one  (;aarter  inch  thick  when 
•old  formanufacturlnc  puipoeee  for  which  raeh  platea  are  ueuallr  required,  not  Including  plalaa 


to  be  eheared  Intopbaeeof  leeewtdth.  _.  j  »„     r.       j 

•  7  Ed.  vn.  chep.  34.    p.  Not  payable  on  euch  Iron  and  trrX  when  exported  from  Canada. 

o.  Pie  iron  marie  in  Canada  from  Canadian  or*  hy  electric  prnceee.  ...  ^. 

g.   at^i  »;2»««s**»»*.«  Ky  «lM,>tfi<*  pro«wM  fiirc^rt  from  Canadian  ore,  and^on  eteel  manuffaft- 
larad  byelwtrie  nroeeee'firom  plajronemeltert  in  i  enada  by  riactrKity  iioea  Canadian  ore. 

•  10  Ed.  Til,  chap.  B.         i.  BonatiM  on  roda  ended  June  90, 1911. 


li  . 


APPENDIX 


335 


E 

BOUNTIES  PAID  ON  IRON  AND  STEEL 
PRODUCTS.  1884-1912' 


Fucal  ye»f  • 

Pig  iron 

Puddird 
ban 

Steel 

Manufarturet 
of  iteel  > 

ToUl 

1884        

•44,090 
38,655 
S9,«70 
59,596 
83,314 
S7,i34 
15,697 
10.153 
80.184 
93,886 
115,044 
63,384 
104,105 
65,509 
165,654 
187,954 
138,196 
851,159 
693,108 
666,001 
838,981 
614.667 
687,631 
888.181 
863,817 
693.413 
873,969 
««1,4S4 

•5,611 

3,019 

7,706 

17,511 

10,111 

16,703 

90,550 

6,70« 

11,<M>» 

7,895 

8,875 

311 

•89.499 

17,366 

67,454 

74,644 

64,360 

100,058 

77.431 

719,101 

847,990 

676,318 

041,000 

875,819 

1.091,101 

838,100 

695,751 

350,486 

•15,314 
131,314 
860,831 
838,000 

847,138 
SSS.OOI 
838,811 
816,858 
166,780 

•44,000 

1888 

38,658 

1886 

80,170 

1887 

89.806 

1888 

88314 

1889 

1890 

87,134 
18,697 

1891 

10,153 

1894 

30,194 

1893      

83,896 

1894      

115,044 

1895      

63,384 

1896    

1807        

168,115 
85,804 

1888 

140,814 

1899 

180,100 

1900 

811,777 

1801      

468,010 

180« 

701,060 

1903    

1.401,808 

1804      

908.96* 

1808    

1,840.104 

1906    

<,OO4,8S0 

1807      

1,100.801 

1808    

•.808,158 

1800      

l,8e4.6U 

ItflO 

1.808,838 

1911 

1,188,748 

I81« 

166.780 

1884-1808 

1886-18H 

•610.607 
7,097.041 

•113,674 

•6,706,980 

•13W.1M 

••10,607 
•16.788.817 

ToUl 

•7,707.648 

•118,674 

•8,706,900 

•M68,I<« 

•17.8*«,484 

>  CompiM  (rom  Report*  on  Mineral  Produdum  in  Canada,  !01C  ud  >91t. 

•  EndioK  June  30  until  1907;  March  31,  thereafter. 

•  In  1804-06,  •117,755  paid  on  angle*  and  plate*;  the  rat  on  rod*. 


'  : 


't' 


m 


¥ 


SS6 


APPENDIX 


•-» 
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00 

I" 


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to 

«l 

fa 
^  5  .S 


sss  s 


i 


SSS    ^   8    888  1 8    8|  |S?^s||fjj3|| 


5S5+ 


"a' 


§88    8    ^S8SS?.8    8|  |6Sis|j.-|S    || 


•J:^^. 


S33   8   8    8^888    8||82r||^|s    Sg 


SI 


I'i '  s  IBS  i"it «« '' 


SiS     I     S    t^'^ti^^I^   tSst?|    ^    |^|8    |S 
£'8     '     £    o««>««    «t«l    «    iS-s*    -* 


|||  '  I  mil  III!  I  un  u 


S.8     I     S    £?£^-^  t^J^^^   ^   5^11    SI 
4    a         5    S2222    2222    8    28**    -~ 


£12      I      E     a>aio>a>a     eaoo     g     "^a**     ** 


Jig     1     g      II^l 'S' 


EiS|^     I     E?   ^1  I  i  I      111^!      if  if   ff 


Mill      MM      I      if  I  I      II 


m 


APPENDIX 


8S7 


I 
S 


^ 


RATES  OF  DUTY 

Table  II 

Acta  affecting  the  custonu  rates  on  certain  iron  and  Heel  products, 

m5-19H 

184S.  8-9  Vic,  chap.  93,  Statuti  .  »t  Large. 

An  Act  to  regulate  the  trade  of  the  British  Dominioiu  abroad,  upon 

any  articles  imported  into  such  posaeasiona  from  countries  other 

than  Great  Britain  and  British  possessions. 
1847.  10-11  Vic,  chap.  31,  repealed  the  imperial  duties  and  reimposed  a 

Canadian  schedule  of  customs  duties. 
18l».  22  Vic,  chap.  76. 
1859.  22  Vic,  chap.  2. 
18S7.  81  Vic,  chap.  7. 
1868.  31  Vic,  chap.  44. 

1870.  33  Vic,  chap.  9,  iron  in  blooms  and  billets  made  free;  coal  and  coke 
subjected  to  a  duty  of  $.50  per  short  ton. 

1871.  34  Vic,  chap.  10;  coal  and  coke  made  free. 

1879.  42  Vic,  chap.  15. 

1880.  43  Vic,  chap.  18;  bituminous  coal,  $.50  per  ton;  slabs,  blooms,  and 
billets.  10%. 

1882.  45  Vic,  chap.  6;  iron  and  scrap  of  certain  kinds,  $1  per  ton;  steel 

billcU  free  until  1883. 
1889.  46  Vic,  chap  13;  iron  and  steel,  old  and  scrap,  free;  rails  f;ee. 
1884.  47  Vic,  chap  30;  wire  rods  less  than  one  half  inch  in  diameter, 

6%;  steel  ingots,  bars  and  other  rods,  $3  per  ton  + 10%. 

1886.  49  Vic,  chap.  18;  slabs,  blooms,  billets.  10%;  iron  and  steel,  old 
and  scrap,  deBned. 

1887.  50-51  Vic,  chap.  39. 
1894.  57-58  Vic,  chap.  33. 
1897.  00-61  Vic,  chap.  16. 

1897.  61  Vic,  chap.  37;  British  preference  of  25%  granted. 

1900.  63-64  Vic,  chap.  15;  British  preference  made  83  J%. 

1903.  3  Ed.  VII,  chap.  15;  iron  and  steel  railway  bars  and  rails,  $7  per 
ton,  put  in  force  by  order-in-council.  August  27,  1904. 

1907.  6-7  Ed.  VII,  chap.  11;  drawback  of  99%  of  duty  on  coal  used  for 
smelting  purpo.ses  allowed. 

1914.  Memorandum  of  the  Departmeni  of  CuHotiu,  Canada.  April  7,  rolled 
iron  and  steel  beams,  etc,  n.  e.  s.  (weighing  less  than  120  p<>unds 
per  lineal  yard),  general  tariff,  $7;  intermediate  tatiff,  $6;  British 
preference,  $4.50. 

Wire  rods,  $2.25  under  the  British  preference  and  $3.50  under  the 
intermediate  and  general  tariffs,  provided  that  imported  rods  used 
in  the  manufacture  of  galvani»ed  iron  and  steel  wire  numbers 
0,  12,  and  13  shall  receive  a  drawback  of  99  per  cent  of  the  duty 
paid. 


i\ 


W 


imm^^:^M 


338 


APPENDIX 


EXPORTS  AND  IMPORTS  OF  IRON  AND  STEEL 

Table  I 
Exports  by  years 


FUcal  year' 


m 


18«8.... 

1869  ... 

1870... 

1871    . . . 

1874.... 

1873... 

1874.... 

1875..., 

1878... 

1877... 

1878. . . 

1870... 

1880.... 

1881.... 

188«. . . 

1883.. . 

18S4... 

188A... 

1888... 

1887... 

1888... 

1889... 

1890... 

1831... 

180«... 

1803... 

1804.. 

1805.. 

1806.. 

1807.. 

1808.. 

1800   . 

1000.. 

1001.. 

^004   . 

190S.. 

1004.. 

1005.. 

1006   . 

1007. 

1008. 

1000 

1010. 

101 1. 

lOK. 

1013. 


EsDorti  of  iron  ud 


•46C,4<0 
401,770 
5Di,Si6 
7M,ni 
1.081,430 
I,40«,300 
009,101 
7*7,105 
l»8,M8 
S46,<06 
546,913 
446,60* 
TI0,1«S 
643,107 
6e4,31« 
561,644 
465,935 
S96,IM 
476,008 
347,445 
443,488 
406,710 
404,748 
457,401 
443,867 
316,454 
405,044 
308,711 
506,046 
544,988 
606,084 
706,411 
1,445.163 
1,434,661 
4,460,781 
8,46:1,040 
1,001,841 
1,143,354 
1.507,306 
1,100,746 
1,670,671 
4,480,087 
4,487,800 
4,671,047 
4,3.16,431 
3,084,565 


Exports  of  pi«  iron 
(calewUr  year)  • 


•55,448 
81,381 
84,645 

149,190 
88,054 

503,730 

778,610 
V«,'84 

4t  ,»6» 

44,484 

7,440 

13,504 

10,(1  U 

180,778 

406,S10 

471,068 

901,704 


Exporb  oi 
irooore' 


r.5S0 
76,474 
114,850 
185,469 
138.774 
66,540 
194,074 
«3,09a 
71.994 
80,94S 
60,489 
91,S7« 
84,58* 
96,085 
(6.114 
9,0«< 
5,749 
5  795 
(.49« 
404 
4,968 
7,689 
150,657 
1,903,901 
739,430 
579,869 
540,000 
845,540 
65,967 
46,686 
71,669 
80.540 
904,718 
199.961 

1 1_ 


»  Caa*fls,  Tis  Prdtatian  (Jlttm  amd  Sisri  m  Canada,  l»l«,  p.  »i. 


APPENDIX 


8S0 


1 


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340 


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APPENDIX 


pJaf»-« 


M     Fi«  91  *•  ^     M  ^  V  n  ^  n  ^  « 


2  i  S  S  g  SS  8  £  5  i  2  S  S  5.n«  5  KS = S -it 


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iWVO^O 


VVrfrfaf  — ^' of  Va*  "♦»•''•  «or-Vo««»»-o«o  • 


I 


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M 


APPEND iX 


841 


EXPORTS  AND  IMPORTS  OF  IRON  AND  STEEL 

Table  III 

Value  qf  Imperii  of  pig  iron,  vrrought  tcrap  iron,  tUel  billeta,  etc., 
and  qf  ferro-producU,  by  yean;  18HS~  1914  ' 


fitni  y«u  • 

KKiroD 

Wniug'it  icr«p 
iron  • 

Sterl  bilh-U, 

iuKoU,  lUh*, 

bloomi  aoil  ban  * 

F»m» 

pr<?tJuct* 

1880 

•371.956 

715.097 

1.043.014 

1.144.749 

743,010 

574.759 

569,569 

631,808 

648.014 

864.754 

1,148.078 

1,085.949 

886.485 

766,567 

518,755 

374,130 

406,317 

347,161 

405,836 

474  034 

850  M6 

855,154 

585,803 

1,354,940 

894,748 

857,879 

1,401,047 

<.481,535 

3,403,600 

873,934 

4.I47.I85 

3,813,931 

3,514,969 

4,153,738 

i,494.363 

•158,100 
440,167 

333.004 
670,343 
654,844 
433,695 
567.007 
355.744 
417.531 
179,716 
91,169 
491,415 
498.443 
635.008 
■39,584 
519.398 
668,971 
498,196 
410,561 
345,.371 
414,537 
506,6ilH 
140,859 
191.784 
408,075 
547.944 
810,5fi4 
514,04' 

•364,463 
406.078 
419.543 
380.034 
419.045 
819.865 
663,70 1 
467454 
•00,014 
180,354 
678444 
040,504 
.«4i,010 

i.814.844 
844,441 

_ 

1881 

— 

1884 

— 

1883 

— 

1884 

— 

1885 

1886 



1887 

•  1,438 

1888 

49,81« 

1889 

74,108 

1890 

18,805 

1891 

43,980 

1894 

40,711 

1893 

15,858 

1894 

9.884 

1895 

5,408 

1896 

14,811 

1897 

9.4SS 

1H98 

njHt 

1H09 

444S* 

1900 

39,064 

1901 

88.954 

loot 

150.977 

1903 

164.710 

1904      

75.554 

1905 

446.8IS 

1906 

464.790 

1907 

610.875 

1008 

«I4,06« 

1909 

388.044 

1910 

344.486 

1911   

431,381 

1914 

460,884 

1913 

7!4.65a 

1914  •        

743.104 

I  CnmptM  from  the  ReporU  qf  Uu  Deparimtnt       I  rode  and  Comwurce,  fipyiilly  ISO* 
•nd  1913.  whicb  give  lumnurin  ol  the  imports  for  i"  ntMii  of  yean. 
>  Enilinf  June  30  until  1907;  Marrh  31.  thereaftrr. 
'  Monthly  fummary  of  commerce,  Deormber,  1914,  Dine  monthi. 
*  Separate  fifurci  not  available  tor  earlier  yean. 


i 


,^ii.-i^ 


S4f 


AITENDIX 


EXPORTS  AND  IMPORTS  OF  IRON    VND  STEEL 

Table  IV 

Valui  oj  ImporU  of  steel  rails,  wire  rods,  bar  iron  and  steel,  ana 
structural  steel,  by  yenm,  ISS.'i-  '9H  » 


FUral  y»»r ' 


,\i 


lass.  . 

IBM.. 

1B8T 
1888  .  . 
1888... 
1880... 
1801  . . . 
188«.... 
1888  .. 

im4.... 

1881.... 

1888.... 

1887... 

1888.   . 

1888.. 

1900... 

IMI... 

1808... 

1808... 

1004... 

180S... 

1808... 

1007... 

1008... 

1008... 

1010... 

1011... 

10H.   . 

10IS... 

1814  • 


StrrI  nib 


WTJ.7S7 

1,43 1. 70« 
1,«I<.5SI 
1.0<l,l«« 

«,«M,itHi 
S.197.«*0 
1.7S8.IWI1 
«340.7HO 
«,01H.7-« 
»«l  113 
1.1.M.17S 
\.H»,*\\ 
1,888.009 
l,0nn,H44 
«.0'M,.1«fl 
S,74*,Jfl9 
«,9A«.)50 
4,489,008 
4,«78..n< 
8,55^.948 
1,107,170 
1,887,885 
l.«78,084 
707,470 
1,S08,»7S 
88A.084 
1,48<,1!U 
S,847,88< 
4,8it0,«>4 


Wirr  rwU 


t»U,037 


8ft4,Am 
858.U< 
7M.777 

1.190,108 
«45,130 

1  .1«.79< 
111,447 

1  '4.149 
7!»^.078 
478.9fll 
308,030 

tas.u* 

SS8,.178 

749.  in 

•33.914 

l,(H».3»7 

8,144.405 

I,SSO,<04 


Bar  ir.  n  and  Structural 

»tt^l  1  it««l 


|4S«,i49 

174,381 

188,031 

109.118 

1 81 ,098 

139,318 

878,078 

448.308 

888.700 

448.048 

047,480 

1,388,348 

1,084,818 

873,034 

1,341.048 

8.147,783 

8.307,007 

1,411.417 

1,031.743 

8,180,343 

8.048,488 

3.018.748 

S,47«,7(J« 


1440  «jT 

487.438 

840,805 

850,487 

870,481 

838,130 

834.115 

885,401 

1,080,818 

850.740 

1.108,948 

1.380.077 

1.478,848 

1,788,878 

1,078.018 

8,418,448 
1,008488 
1.088,588 
8,104,340 
4.708,080 
5,181.813 
7,841.078 


I  CompiM  from  lUpoH*  <^  tlu  Dtvartmml  ^  Trad,  and  Commtrte.  1805  «id  191S. 

•  Ending  June  SO  until  1907;  March  31,  thereafter. 

•  Nine  oiuDth*  ending  December  SI,  1014. 


t^^  Ai 


APPENDIX 


343 


H 

AMERICAN  PRICES  OF  CERTAIN  IRON  AND 
STEEL  PRODUCTS.  BY  YEARS,   1860-1918  > 


Ywr 


If«(IO  .. 
IMI  .. 
1M«  .. 
I8SS  .. 
1M4... 
IWU... 
18M... 

ias7... 
18m  .. 

IHM  .. 
1870. . . 
1871. . 
187«  . . 
1873... 
1874  .. 
1874. . . 
1876  .. 
1877... 
1878. . . 
1878... 
1880.. 
IH8I.. 
188«. . 
1883.. 
1884   . 

•*aa.. 

.JiM  . 
18H7  . 
1888.. 
1888.. 
1880.. 
1K8I.. 
18^4  . 
IHOI  . 
IHM.  . 
IMS.. 

I8»a.. 

1887   . 

1898  . 

I8M.. 

1800.. 

IBOl.. 

180«.. 

1903.. 

1904 

1908. 

1906. 

1907. 

1908. 

1909. 

1910. 

1911. 

191«. 


PSairon 

(N...  1 
Foufiilry 
PhiUMlrl 

pbU) 


|«.7() 
«!.<« 
S3.94 
33.44 
S9.t» 
46.08 
46. H4 
44.08 
30. tS 
4061 
S3.<3 
fS.  <* 
it-    ' 
4*97 
30.19 
4SM 
M.10 
18.9« 
17.67 
«l.7« 
48.48 
«>.17 
•5.77 
M.4« 
19.81 
17.79 
18.71 
«0.93 
18.88 
17.76 
18.41 
17.4^ 
13.73 
14.38 
14.66 
13.10 
14.93 
14.10 
11.66 
19.37 
19.98 
13.87 
M.19 
19.94 
15  57 
I    88 

ill  <m 

44.40 
17.44 
17.46 
17.36 
13.71 
16.56 


Bar  iroo 


•38.73 

eo.HS 

70  44 
91  04 

144.46 

lUfi46 

9H  13 

87.08 

83.63 

81.67 

78.96 

78.34 

97.69 

M6.43 

67.95 

60.85 

54.85 

45.55 

41.44 

51.85 

64.04 

38.05 

34.31 

44.44 

38.45 

86.50 

88.08 

43.39 

39.67 

S8.S0 

41.43 

88.:"< 

86.-; ' 

3^.33 
46.88 
48.09 
47.44 
44.73 
43.93 
43.73 
48.14 
40.38 
43.33 
39.59 
83.17 
41.89 
43.43 
40.87 
39.87 
39.44 
87.00 
34.f!() 

HJ.OO 


RmIi 


Ifoa 


1  00 
««18 
4173 
7<»H8 

148  00 
98.13 
8673 
83.73 
78.H8 
77.48 
74.43 
70.38 
83.18 
76.87 
5e.75 
47.75 
41.43 
35.45 
33.75 
41.45 
49.45 
13 
4a.30 


SImI 


tl66.jo 

•38.46 

1.14.19 

106.79 

104.34 

11194 

140.38 

94.48 

68.73 

l>9t3 

43.38 

44.41 

48.41 

67.34 

61.0S 

48  J. 

n.75 


Ntib 


Cut 


SO.'jO 

48.14 

44.00 

44.33 

48  00 

1H.75 

17.64 

4H  14 

34  «9 

t7..'iS 

•8.00 

48.00 

48.00 

"•M.OO 

48.00 

48.00 

48.00 

48.00 

48.00 

48  00 

48.00 


t.i.13 
4.73 
3.47 
5  13 
7.83 
7.08 
6.97 
3.84 
8.17 
4.83 
4.40 
4  34 
3.46 
4.90 
3.99 
3.44 
4.98 
4.37 
4.31 
4.69 
3.68 
3  09 
3,  i ) 
3  06 
4.39 
4.39 
4.47 
\t\. 
13 
<« 
UO 
..86 
1.83 
1.44 
1.08 
1.36 
4.36 
1.47 
1.31 
•41 
H» 

:%» 

1.36 
4.01 
4.50 
4.19 
1.86 
1.83 
1.84 
I.B4 
1.71 
.71 


Wire 


(3.15 
4.55 

4.49 

4.31 

4.04 

1.70 

1.49 

l.ll 

1.6« 

«.54 

1.46 

1.45 

4.60 

t.7« 

4.41 

4.18 

4.19 

1.96 

1.98 

1.98 

l.S« 

1.9* 

1.77 

1.88 


>  Mineral  Iniluttry.  1909,  pp 
Labor,  ou.  1 14,  Mmrch,  18 13. 


443-44.  Bod  UniUd  SUte.,  0iiU«hii  of  the  Burt<iu  of 


844 


APPENDIX 


1^- 


:l    i}  = 


THE  COMBINATION  MOVEMENT  IN  THE  CANA- 
DIAN IKON  AND  STEEL  INDUSTRY 

Table  I 

Amalgamation$ 

Canada  Car  and  Foundrj'  Company. 
Formetl  in  1910  to  include 
Canada  Car  Company; 
Dominion  Car  and  Foundry  Company; 
Rhodes  Curry  Car  and  Foundrj'  Company; 
Pratt  and  Letchworth  Company  (ad<ltfl  in  1011); 
Canadian  Steel  Foundries  (stock  ownership). 
Canada  Iron  Corporation. 
Formeti  in  1908  to  include 
Mines  in  Ontario; 
John  McDougall  &  Company; 
Drummond  Iron  Mining  Company, 
Annaiwiis  Iron  Mining  Company; 
Canada  Iron  Furnace  Cornpan.* ; 
Canada  Iron  and  Fovndrj-  Company; 
Londonderry  Iron  and  Mining  Company. 
Canmlian  Steel  Foundries. 
Formed  in  191 1  to  include 
Montreal  Steel  Works; 
Ontario  Iron  and  Steel  Company. 
Dominicm  Steel  Corporation. 
Formwl  in  1909  to  inchule 

Dominion  Coal  Company,  an  earlier  consolidation, 

Sydney  and  I^misburg  Railway  Company,  formed  1909 
as  a     .hsidiarj'. 
Dominion  Iron  and  Steel  Company; 

Cumberland  Railway  and  Coal  Company,  an  earlier  con- 
solidation, adde<l  in  1910. 
Sydney  Lumber  Company  (stock  ownership,  191 1). 
Lake  SuiK-rior  Coqwralion. 

Formed  in  1905  to  control.  I)e8i<le9  miscellaneous  industries, 
Algoma  Steel  Corjwration,  1011; 
Algoma  Steel  Company ; 
Algoma  Commercial  Company; 


APPENDIX 


S45 


)9 


Cannelton  Coal  and  Coke  Company  (added  in  1912) ; 
Fiborn  Limestone  Company  (added  m  191X}. 
Nova  Scotia  Steel  and  Coal  Company. 
Formed  in  1901  to  unite 
General  Mining  iVssociation,  1829; 
Nova  Scotia  Steel  Company,  1895; 
New  Glasgow  Iron.  Coal  and  Railway  Co^P^y- 1«>1' 
Nova  Scotia  Steel  and  Forge  Company,  1892; 
NovaS  otia  Steel  Coal  Company; 
Nova  Scotia  Forge  Company.  „    ,    ,  ,. 

Eastern  Car  Company  (added  in  1912.  all  stock  owned). 
Steel  and  Radiation  Company. 
Formed  in  1910  to  unite 
Expanded  Metal  Company; 
King  Radiator  Company; 
Taylor-Forbe?  Company; 
Dominion  Radiator  Company. 
Steel  Company  of  Canada. 
Formed  in  1910  to  unite 

Hamilton  Iron  and  Steel  Company.  1899; 
Hamilton  Blast  Furnace  Company; 
Ontario  Rolling  Mills  Con.pany; 
Canada  Bolt  and  Nut  Company.  1910; 
Toronto  Bolt  and  Forging  Conipany; 

purehasetl  the  McDonncU  RoUmg  Mills  m  190S; 
Gananoque  Bolt  Company; 
Brantford  Screw  Company; 
Belleville  Iron  and  Horseshoe  Company; 
Montreal  Rolling  Mills; 

Pillow-Hersey  Company;  .     _j  -    i«mwi\. 

Hodgson  Iron  and  Tube  Works  (purchased  m  1906), 
Cai.a(<a  Screw  Company; 

Ontario  Tack  Company  (purchased); 
Dominion  Wire  M»J»ufac-turing  Company. 
Unitc<l  SUtes  Steel  Corporation.  ioi«_in- 

OwncHl  Dominion  Wire  Manufacturing  Company.  1905-10. 
Wire  plant  at  'Camilton; 
United  SUtos  Steel  Products  Company; 
Sandwich  plant  proposed; 
Iron  ores? 


\' 


S46 


APPENDIX 


*  ■,* 


■< 
H 


♦-•S!^ 


« 

I 


& 


J 

1 

•> 

3 

(3 

§ 

S 

s 

«i 

i 

a 

a 

tx: 

Si 

1 

s 

B 
1 

S 
en 

B 

s 

Q 

0. 

B 

i 

B 

^ 

M 

M 

X 

2; 

H 

&3 

cd 

•5 

}f 

■t 

"> 

*3 

•  ■-*  1 

' 

< 

'79    1 

z^ 

:i  ' 

— /»  ■ 

~"   ■ 

1 

1 

1 

■ 

■ 

APPENDIX 


847 


TARIFF  MEMORIALS 

I.  Memorial  to  Mdjisteh  or  Financb 

November  21,  Idl. 
To  THE  Honorable  The  Minibteb  or  Finance,  Ottawa, 
Ont. 

This  statement  is  respectfully  submitted  for  the  consideration 
of  the  Government,  on  In-half  of  the  following  eompaniea. 
comprising  all  the  manufaiturers  of  iron  and  steel  m  Canada: 
Dominion  Iron  and  Steel  Company,  Limited.  Sydney.  Nova 
Scotia;  Nova  S<-olia  St.vl  and  Coal  Comjmny.  Lmiited.  New 
Glasgow  Nova  Scotia;  Ix.ndonderr>  Iron  and  Miinng  Company, 
Limite.1.  Londonderry,  N«.va  Scotia;  (^anada  Iron  ^  oyP«';»^;e"- 
Limited.  Radnor.  Drumnu.ndville.  QihIk-c.  and  Midland.  On- 
Urio;  Deseronto  Blast  Furnace.  operate<l  by  R.  J.  Me^'lf* 
Co  Deseronto.  OnUrio;  Steel  Company  of  Canada.  Limited. 
Hamilton.  Ontario;  Algoma  Steel  Company.  Limit.-d,  bault  Ste. 
Marie,  Ontario;  Alikokan  Iron  Company.  Limittsl.  Port  Arthur, 

^b^'the  last  general  revision  of  the  tariff  in  18  T  serious 
changes  have  taken  place  in  the  fi^uU  policy  of  the  country  affect- 
bgt^  manufacture  of  pig  iron  and  st,^l.  At  that  date  there 
were  bounUes  in  force,  which,  when  abided  U,  the  existing  duti«.. 
gave  .  protection  equal  to  $4.50  per  ton  on  pig  iron,  and  $7  to 
t8  per  ton  on  steel  billets.  

The  British  preferential  Uriff  brought  about  a  general  reduc- 
tion.  until  the  present  rates  were  fixed  in  1907.  It  was  «iefimtebr 
und;rsto«l  that  on  the  withdrawal  of  the  lK,unties.  these  lowered 
duti«  wouM  iH-  readjuste.1.  but  nothing  wlmtever  was  done,  and 
when  the  bounties  c«-ased  in  Deeemln-r.  1910.  the  industry  was 
left  with  the  following  ina.lequate  duties  on  its  Imsie  l'«>duc^:  - 

On  pig  iron,  preferential.  $1.50  per  ton;  general,  $«.50  per 

^''on  steel  billets,  preferential.  $1.50  per  ton;  general.  $2.50  per 

*"The  averaK-  value  of  the.-  commcKlitcs.  under  """"^O,  Jrajh: 
conditions,  mav  Ik-  taken  as  $1.5  for  pig  iron  and  $««  for  billtU, 
2  that  the  preferential  Uriff.  which  largely  governs  prices,  gives 


mi 


S4B 


.VPPENDIX 


m 


a  protection  of  10  per  cent  on  pig  iron  and  7  per  cent  on  steel 
billots. 

The  effective  protection  Riven  in  18»7and  later  years  lias  thus 
been  re<luce<l  on  tln'se  articles  to  alnnit  one  third Or  less.  That 
the  earlier  i)rotcction  was  effective  is  shown  by  the  increase  in 
priMliiction. 

In  1900  the  total  amount  of  pig  iron  produced  in  Canada  was 
90.575  tons,  and  <)f  steel,  20.456  tons. 

In  1910.  the  toUls  were,  pig  iron,  740.244  tons;  steel,  740.290 
tons. 

The  present  position  of  the  iron  and  steel  trade  may  be  thus 
summarized :  — 

1.  Prior  to  1910  the  ctimbined  protection  affordetl  by  the  du- 
ties and  bounties  enable*!  manufacturers  to  retain  a  sufficient 
hold  on  Canadian  business,  notwitlistanding  the  competition 
from  abroad. 

«.  In  1910  the  protection  was  so  far  nxluced  l>y  the  d(>crease 
in  iMjunties  as  to  make  it  more  difficult  to  retain  the  tra<le, 
while  their  cessation  on  DecemlH-r  31  of  that  year,  which  left 
the  manufacturers  to  the  pn)tection  affonled  by  the  present 
inad««quate  tariff  only,  has  ren<lcrcd  this  difficulty  more  acute. 

S.  The  depressecl  state  of  the  iron  and  steel  tra<le  abroad, 
coupled  with  our  inadequate  tariff,  affect  the  Canadian  trade  by 
making  it  difficult,  in  some  cases  impossible,  to  hold  the  business 
it  has  hitherto  had.  Some  manufacturers  Imve  exi>ende<l  a  large 
amount  of  capital,  and  come  under  serious  financial  commit- 
ments in  connection  with  extensions  of  their  plants,  in  order  to 
increase  their  output,  and  the  possible  future  effect  of  the  con- 
ditions above  named  is  to  them  a  caust*  of  great  anxiety. 

It  is  not  desirable  tliat  we  should  now  enter  on  the  question 
of  duties  on  more  fipLshcd  articles;  any  representations  on  these 
matters  ari-  reserve<l  for  the  Tariff  Coinniis8ion ;  but  we  should  at 
least  point  out  how  seriously  these  duties  are  weakened  by  the 
numerous  exemptions. 

The  manufa<-turer8  of  the  most  imfMirtant  lines  of  agricultural 
implements,  of  springs,  axles.  t<x»ls.  iMtLsteads.  windmills,  etc., 
have,  in  effect,  free  iron  and  steel.  an<l  in  nmn>-  cases  the  materials 
ma<le  free  are  tlios*-  whose  maniifuctun-  had  Ikh-u  s|K-<'ially  pro- 
moted by  the  tariff  as  it  sUkxI  In-fore  the  exemptions  were  grantetl. 
These  exemptions  are  one  of  the  main  <auses  of  the  difficulties 
in  which  we  find  ourselves. 

Another  cause  is  the  application  of  low  rates  of  duty  to  the 
larger  sizes  and  sections  of  rolled  steel.    This  has  shut  out  the 


APPENDIX 


S40 


Canadian  mills  from  a  large  and  important  field,  and  restricted 
tliera  to  the  manufacture  of  the  smaller  se<-tions. 

The  only  other  branch  of  business  to  which  we  wonUl  refer  is 
the  manufacture  of  wire  rods.  The  consumption  in  Canada  of 
wire  rods,  wire,  and  wire  products,  is  not  far  short  of  !2()<).()00 
tons  yearly,  and  less  than  one  half  are  made  in  Cana^lu  from 
Canadian  raw  materials.  Since  the  cessation  of  the  Innrnty  wire 
ro<ls  are  entirely  unprotected;  they  do  not  even  share  in  the  pro- 
tection accorded  to  the  billets  from  wliich  they  are  made.  It  is 
respectfully  urged  that  the  anomalous  |M)sition  of  this  im{M>rtant 
industry,  which  cannot  be  remedied  until  the  whole  tariff  is 
dealt  with,  calls  for  immediate  relief,  and  adds  special  weight 
to  the  request  we  are  herein  preferring. 

The  statement  of  the  imports  of  iron  and  steel  into  Canada  for 
the  fiscal  year  ending  31st  March,  1911,  shows  tliat  the  Cana- 
dian manufacturers  have  a  large  field  yet  to  occupy.  The  unre- 
vised  trade  returns  show  imjrarts  of:  — 

«37.8«S  tons  «I  stoel  of  value  of        $U,868.7.'5« 
870,1m  tons  of  pig  iron  of  vuhic  of      3,013.B3I 


Total..    .807,965 


Valued  at.  .  .$18,482,083 


These  imports  are  in  quantity  not  far  short  of  the  ent  ire  present 
production  of  the  Canadian  plants,  imlicating  ample  field  for 
growth,  which,  however,  cannot  be  occupie<l  to  any  great  extent 
under  the  existing  tariff  with  its  discriminations  and  exemptions. 

The  cost  of  labor  represents  approximately  80  per  cent  of  the 
cost  of  manufacture  of  iron  and  .sN-el,  and  the  above  figures 
indicate  that  about  $12,000,000  was  paid  by  Canada  in  wages 
to  foreign  workmen,  for  iron  and  steel  int[>orted  in  the  year  re^ 
ferret!  to,  much  of  which  ought  to  have  gone  to  Cana<lian  work- 
men. 

A  large  increa.se  in  the  amoimt  of  iron  and  steel  made  in  Can- 
ada would,  therefore,  not  only  help  the  industry  by  reilucing 
costs,  and  providing  an  adequate  return  ujKjn  capital,  to  the  en- 
couragement of  further  development,  but  would  build  up  indus- 
trial populations  in  Canada,  by  providing  a  large  amount  of  well- 
paid  work,  now  done  for  us  abroad.  It  is  rf-spectfully  urged  that 
such  protection  should  be  accorded  as  will  enable  these  results 
to  be  reached. 

We  would  also  call  attention  to  the  fact  that  the  larger  jwrtion 
of  the  imports  alnive  referred  to  come  from  the  I'nitwl  States, 
and  that  most  of  the  gixMis  thus  lirought  into  Canada,  under  u 


1  i 

1 


/  ij 


850 


APPENDIX 


tariff  which  is  either  very  low  or  is  rcii(!ere<l  ineffective  by  exemp- 
tions, are  subject  to  a  very  lii^h  rate  of  ilutv  when  entering  the 
l'nito<l  SUtes. 

Further,  when  (iepres.sion  exists  in  the  United  States,  as  at 
present.  Canada  is  their  nearest  and  most  available  slaughter 
market.  T*-,  'dninping"  elausi*  is  effective  where  a  fair  rate  of 
duty  is  impose*!,  but  where  go<Kl8  are]  free,  or  are  subject  to  a 
nominal  duty  only,  the  "dumping"  clause  is  not  effective,  and 
large  quantities  of  iron  and  steel  are  now  being  sold  in  Canada 
at  or  l>elow  the  Anieriea-i  <-ost  of  prtxluction.  This  makes  the 
neetl  of  some  relief  for  t's-  iron  and  steel  tnide  a  verj'  immediate 
and  pressing  question. 

As  to  tlu-  vi«-w  wiii<-h  the  communify  ma>  take  if  it  is  proposed 
to  relieve  one  siKt-iuI  tra<le  from  the  di-mdvantaKcs  under  which  it 
lalM)rs.  while  others  with  a  similar  claim  to  consideration  are  un- 
tou<lie<l,  we  would  resiMvtfuliy  iir^ji-  tliiit  the  otaMishment  on 
a  sound  fiMitinf,'  of  the  great  liasic  industries  of  iron-  and  steel- 
making  is  uiii\  t  rsjiliy  regarded  as tif  tile  primary  need>  of  the 

•sMuitry.  und  lias  l«-eii  so  consideri'il  l>y  Parliament  for  the  past 
twenty-five  years.  We  are  of  the  opinion  that  the  lowj-ring  of 
duties  on  iron  an<l  steel  which  was  made  |M)ssible,  or  at  aii,\  rate 
rendered  less  ;,i;i!rin>;s,  by  •cnson  of  the  Ixmnties.  the  continu- 
ance of  tlie.s«'  duties  at  the  lower  rates  when  the  bounties  are 
gone,  and  the  cons<Hpient  inade<iuacy  of  the  [)roUH>tion  afforded 
to  these  in<lustri«s,  iuihI  only  to  be  made  known  to  s«Kure  full 
su[)j>ort  for  any  reasonable  renu-dy  from  all  who  desire  to  see 
Canada  prosper. 

The  GoviTument  having  announce*!  that  a  Tariff  romnus.sion 
will  Im-  appointetl,  it  is  a.ssume<!  that  it  will  not  1m>  pos.sible  to  deal 
with  any  changes  in  the  tariff  until  the  Conmji.s.sioii  l.as  completed 
iLs  in<|iiirA    md  made  its  n-jMtrt. 

Wi-  respectfully  subnut  thai  the  jMJsition  of  this  industrj-  in 
respect  to  the  tariff,  and  tlie  conijM'tition  t(.  which  it  is  exiMi,s<'d 
from  countries  lalMtring  under  great  depression  in  the  inm  and 
steel  tra<!es.  justify  us  in  asking  sjMHMal  ant!  immediate  considera- 
tion from  the  Gov.rnment.  and  that  some  protection  shoidd  l>e 
accjrde*!,  jn'mling  the  results  of  the  i-Hjuirj-  by  the  Commission. 
The  iron  and  steel  trade  of  Canada  has  tluring  the  whole  of  the 
present  year  suff«"red  under  the  inade<|uate  |)rote<"tion  above 
referrtn!  to.  and  unless  some  form  of  relief  is  now  given,  it  must 
continue  to  suffer  for  probably  two  years  to  come,  s<i  that  the 
di'VeloDnunt  of  the  industry  would  b<-  s«'riou.sly  retanli-*!.  Since 
no  cl;urge  in  the  duties  can  at  present  lie  made,  it  is  re»i>ectfully 


APPENDIX 


351 


suggested  that  there  should  be  a  temporary  bounty  on  pig  iron 
as  the  basis  of  the  industrj-. 

Surh  a  bounty  should  be  regarded  as  a  partial  compensation 
for  the  disabilities  under  whitii  the  industry  has  been  placed 
through  the  lowering  of  duties,  exemptions,  and  discriminationa 
referred  to,  and  through  the  withdrawal  of  bounties  without  any 
readjustment  of  the  duti'>8.  and  should  further  be  regarded  as  in 
the  nature  of  a  temporary  measure  of  justice,  pending  a  full  con- 
sideration of  the  whole  question  by  the  Government. 
We  have  the  honor  to  be.  Sir, 

Your  obedient  servants. 
Dominion  Iron  and  Steel  Company,  Limited, 

J.  H.  Plummer,  Prendent. 
Nova  S<-otia  Steel  and  Coal  Company.  Limited. 

Thomas  Cantley,  General  Manager. 
Londonderry  Iron  and  Mining  Company. 

Jolm  J.  Dnimniond,  Managing  Diredor. 
The  Canada  Iron  Corporation.  Limited, 

Eflgar  McDougall.  Vice-Pres.  and  General  Manager. 
Dcseronto  Iron  Furnace  Co., 

R.  J.  Mercur  &  Company,  Operating. 
The  Steel  Company  of  Canada, 

R.  Hobson,  Vice-Pret.  and  General  Manager, 
Algoma  Steel  Company.  Limited. 

T.  J.  Drummond.  Prendent. 
Atikokan  Iron  Company, 

By  William  Macicenzie. 

Canadian  Imports 
Extracts  from  the  Trade  and  Navigation  returns  for  the  Year 
ending  Slat  March,  1911 
Tariff  lb-ma 

373.  Pig  iron:  270.102  tons;  value.  $3,613,931. 

Oi  this  quantity.  151.849  tons,  val 'ed  at  $«.084.720  came  from 
the  I'nited  States.  It  is  estimated  that  nearly  one  half  of  the 
<juantity  imported  from  the  I'nited  States  was  used  in  the  manu- 
fmture  of  articles,  which,  under  Schedule  B  of  the  Customs 
Tariff,  obtainitl  a  rebate  of  »9  per  cent  of  the  duty. 

Canadian  duty:  Preferential,  $1.50;  General,  $8.50. 

I'nited  States  duty:  $2.50. 

S76.  Iron  or  steel  billets.  ingoU.  blooms,  slabs,  bars,  etc.,  lesa 
finished  than  iron  or  steel  bars,  but  more  advanced  than  pig 
iron:  47,(i84  tons;  v due,  $929,652. 


:Xi.' 


I 
I 

I 


3 11 


ssi 


APPENDIX 


Canadian  «liit.v:  Prof*  i-cnlial.  $1.50;  General.  IS-SO. 
Ututwl  StaU's  duty:  $0  jht  net  ton. 

377.  Rolled  iron  or  steel  angles,  tees,  l>eams.  channels,  gird- 
ers, and  other  rolled  sha|>es  or  sections,  under  35  pounds  per 
yard:  56,51«  tons;  value,  $1,580,387. 

Of  tlii.4  quantity.  43,013  tons  canie  from  the  United  States, 
valuc<l  at  $1.1262.400. 
Canaciian  duty:  Preferential.  $4.25;  General.  $7. 
I'nitfd  States  duty  $8  jht  net  ton. 

378.  liar  irou  or  !>teel,  rolled;  roumls.  ovals,  squares,  flats, 
etc.  N.O.P.:  104.895  bms;  value.  $3.179.9«1. 

Of  this  (|uantity.  84.050  tons,  valued  at  $2,533,747.  came  from 
the  Unite«j  States,  quite  one  half  of  which  was  u»e<l  in  the  manu- 
facture of  articles  named  in  Schedule  B  t)f  the  Customs  Tari£F 
and  ol)taine<l  rebate  of  90  per  cent  of  the  duty. 

Canadian  duty:  Preferential.  $4.«5;  General.  $7. 

ITnilwl  States  duty:  $8  per  net  ton. 

379.  Itolled  iron  or  steel  beams,  channels,  angles,  etc.:  1S4.085 
tons;  value.  $3,209,773. 

Of  this  (|uantity.  78.167  tons,  valued  at  $2,184,078  came  from 
the  Unitecl  States. 

Canadian  duty:  Prefe.-ential.  $2;  General.  $3. 

ITnite<l  States  duty:  $8  per  net  tx)n. 

379.\.  Flat  eye  bar  blanks  and  universal  mill  plates,  over  twelve 
inches  wide,  for  use  in  nianufactni<-  of  bridges,  stnictural  work, 
or  in  car  constniction:  24,525  tons;  value,  $<t58.847. 

Canadian  duty:  I*rcfen>ntial,  $2;  General,  $3. 

Unittnl  .States  <luty:  $10  jK'r  net  ton. 

380.  Boiler  plate  of  iron  or  steel,  not  less  than  SO  inches  in 
width,  for  use  in  the  mauufacture  of  ixjilers:  15,094  tons;  value, 
$492,247. 

Canadian  duty:  Free. 

lTnite<l  States  duty:  $10  jxt  net  tf<n. 

881.  KolU><l  iron  or  steel  plates,  not  less  than  3u  inches  in 
wi<lth:  41»,3»H  tons;  value,  $1,'-22,'{,212. 

Canadian  duty:  Preferential.  $*;  General,  $3. 
llnit^l  Statcf  duty:  $10  per  net  U>ii. 

882.  llolle<l  inm  or  steel  sluN'ts  or  plates,  shearwl  or  iinsheared 
and  skelp  iron  or  sU-el  N.O.P.:  25.407  tons,  value.  $756,212. 

Canadian  duty:  Preferential.  $4  25;  General,  $7. 
l^iilt-tl  Stales  duty:  $10  per  net  ton. 

387A.  Steel  in  bars  or  sheet.4 :  when  used  in  the  manufacture 
of  shovels:  1,556  toiis;  value,  $44,546. 


|U.' LW 


nPR 


APPENDIX 


858 


Canadian  duty:  PreferenUal.  $«;  General.  |3. 
United  States  duty:  (6  jkt  net  ton. 

•iJ^OoJ:'"'"''""  ''''*''  "'  ''"''  description:  M.046  torn;  value. 

ulS't'^' Sul"*';  ^'!r  "'*'•  •«=  G«""*''  «8  per  net  ton. 
united  SUU-s  duty :  $.5  jht  net  ton. 

Canadian  duty:  Free. 

Unit«l  SUtes  duty:  $5  per  net  ton. 

470.  Iron  or  steel  masts,  and  iron  or  steel  beams   eh»nn»I- 

Umted  States  duty  i^  per  net  ton. 

valJe.»Sr°'  ""  ''^'  *  '"•  "'''  -'^-^  »«.«8«  tons; 
Canatiian  duty:  Free. 
UnitetJ  States  dutv:  $6  per  ton 

Cuiia'Siflri  d'ii\    r  •ee. 

hx.  I.isive  of  ,uf;  I.-.n  the  foregoing  shows  import*  durinir  the 
year  - ,  Jmg  Marc  n  81.  191 1,  of  aurmg  ine 

?***?  «37.Sf,3  U.m  oj  •  value  of . . .  ,,.„«,  ,,^ 

».,,  -:-  3.618.9SI 

T'.ial         »On,'.i(i'.    ••        •«     « 

Of  the  foregoing  imnorUitioas,  — 


■  918.48t.68S 


?iI;S?S  '?•"■  ""*  ""•A"-  •"  •^"li"  -^  •>  ~  P'rf'm.Ud  ~«d  ttJO  p„  too  r^rJ 
«0O,4«4    "  ..  ♦■"  '•      8.00       ••■^f^- 

74.000    "    («Un.««J| ,  ,K  ,„bj«ct  to  .  «b«. ol» p« cwt 

lni!r  ""^^r**^  u*^^  °'  *"**•  imporUUons  of  iron  and  steel 
into  CanacJa  less  than  I50.(m  tons  were  subieet  tntUU-  iTT 
duties:  $4.25  preferential  and  $7  generL  '"*•*'** 

II.   ANONTHOnS 

Prices  on  Steel  I   ,n,,  etc..  at  Pittsburg  (taken  from  the  "Ir^n 
Age.    January  4,        «)  during  the  year,  fflie  to^/loLblive:!!: 


High  point.  ,907-^ iTr-^TirS 

i-,:{:?L.ApHi.,9oo  -:i:{P!:?js:is- 

High  ,.ri  ...  I»li 1  40    Lr  inn  Ik!' 


For  export  to  Cuads 
•140  per  100  lbs. 
1»7J  per  100  lbs. 
1  10  per  100  Ibg. 
1-30  per  100  lb». 
1  «0  fxr  100  lbs. 
100    per  100  lbs. 


1 


354  APPE  DIX 

At  the  be{(innifi(;  of  lOlo,  intt-v*  at  PitiithurK  wore  about  $1.50 
ptT  hundred  [KnimN  f'"-  hom*  '!•«•  und  $1.40  for  exjxjrt  ♦•>  C'an- 
lula:  dfciine  was  ftrmiual  diiriiif(  thu'  year  and  early  101 1.  hut 
during  thr  <M>r(md  iialf  of  lOII  prut-ii  wrukcnrd  rapidly,  falling 
as  low  as  $1.()8  to  $1.10  for  home  <-oniiii'U|ilioii  and  n  attractive 
Bfiecifications  aa  low  as  $1  for  Canada. 

Anirriran  furnaces  in  Lake  Sujjerior  district  have  l>een  selling 
iron  at  $11.50  Dululh  for  dclivcrj-  into  'anada  This  is  away 
below  cost  of  manufacture. 

Buffalo  furnaces  a«'ll  at  a  lower  pri*^  outsid*-  Buffalo  district 
than  within  Canada,  a  large  (juantity  >f  irou  ha\n  ;<  r-it-ntly 
iMH-n  sold  in  Canatia  by  Buffalo  furnaces  at  from  $W.50  to  $13.00; 
the  trade  nn-ognizr  that  this  i.'*  In-hiw  cost. 

Average  pric««s  on  foumlry  pig  iron  at  principal  consuming 
points  in  thf  jorthern  Unite*!  States,  as  comimred  with  prices  at 
Toronto  and  Montreal :  — 

nii<-»(fo        Buffalo        Toronto       Montreal 
dutrit't         (lutrii-t         diitrict  diilrirt 

lOOfl Ul.W  eaO.lM  $19.40  $17.74 

1»07 84.50  84.50  80.00  18.60 

1908 I8.i0  17.50  10.00  17.85 

1»0» 18.50  17.50  18.85  17.00 

1»10 18.00  17.00  18.85  17.85 

l»n 16.00  15.00  17.50  16.75 

High $87.85      $86  75      $81 .00      $19.00 

Average 19.05         18.60        18.75        17.40 

Low 15.00         14.50         16.75         16.84 

January,  1918 $15..'->0      $16  i.j      $17.85      $18.00 

It  is  a  well-understood  condition  of  the  iron  trade  throughout 
the  world  tliat  makers  of  pig  in>n  recjuire  to  average  up  their 
profit.1  !n  the  priws  they  receive  in  gcxHl  \-enrs  to  enable  them 
to  overcome  the  losses  the>  sustain  in  lean  yt-urs.  The  foregoing 
allows  rhat  the  American  laakers  of  pig  iron  .secured  prices  for 
their  priMhu-t.s,  for  in.stance.  in  1907  that  enable*!  them  to  meet 
t:ic  low  prices  ruling  in  191 1.  The  Canadian  prMJucers  faibni  to 
attain  this  j)osition.  for  the  reajMHi.x  given  Ih-Iow.  The  figures  will 
further  show  that  the  Canadian  <H>n.sumer  of  pig  iron  lias  i»een 
able,  during  the  past  seven  years,  to  buy  lii.s  metal  on  the  aver- 
t^pr.  {-t  I'lwer  prices  than  could  the  American  con.sumer  in  his  own 
'iiurkci.  The  conditions  affecting  the  (iinadian  iron  i.iilustry 
injuriously  were:   — 

1.  Home  competition. 

2.  Keen  com;  <'lition  from  British  iron  made  with  cheap  U'.H^r 


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APPENDIX 


855 


and  admitted  at  prefi  rential  duty  of  $1.68  per  gross  ton,  or 
equal  to  about  10  pe-  cent  ad  valorem.  This  competition  was  very 
marked  in  the  East,  at  seaboard  points,  and  extended  to  a  greater 
or  lesser  extent  as  far  west  as  the  head  of  the  Lakes. 

3.  Crushing  competition  in  bad  years  from  United  States 
makers,  especially  in  the  Buffalo  district,  iron  being  dumped  on 
the  Canadian  market  at  unremunerative  prices,  figures  named  for 
export  to  this  country  being  often  fully  $2  per  ton  lower  than 
those  charged  to  local  consumers  in  the  districts  of  the  United 
States  furnaces.  The  "dumping"  clause  of  the  tariff  could  not, 
however,  be  applied,  as  Buffalo  furnaces  sometimes  sold  part  of 
their  product  for  delivery  to  distant  points  in  their  own  country 
at  prices  as  low  as  for  shipment  to  Canada. 

During  the  period  of  years  from  1906  to  1911  inclusive  the 
highly  developed  industry  of  the  northern  United  States  re- 
ceived  approximately  $18.50  per  gross  ton  at  the  furnace  for 
its  product,  whereas  the  undeveloped  Canadian  industry  re- 
ceived about  $17.50  at  furnace. 

Prices  on  foundry  pig  iron  delivered  at  principal  consuming 
points  in  Ontario,  such  as  Toronto,  Hamilton,  Brantford,  Gait, 
Guelph,  etc.,  during  the  years  mentioned  below:  — 


U.S. 

English 

Canadian 

1906.... 

. . .  .$23.50 

$19.50 

$19.50  "1 

Avge.  $1 8.85  delivered. 

1907.... 

. ...  27.75 

20.25 

2C.25 

$1.10  Freight  from 

1908. .  . . 

....  20.75 

19.00 

19.00 

furnace. 

1909. .  . . 

....  20.50 

18.25 

18.25 

Y      $17.76  at  Canadian 

1910. .  . . 

....  20.00 

18.50 

18.50 

furnace. 

1911.... 

....  18.00 

18.50 

18.00 

$16.16  at  Canadian 

Jan.,  1918.... 

....  17.26 

19.oD 

17.25  J 

furnace. 

From  the  above  it  will  be  n»yted  that  prices  on  Canadian-made 
pig  iron  are  governed  by  the  lowest  prices  obtainable  from  out- 
side sources. 

It  is  estimated  that  fully  75,000  tons  of  pig  iron  are  imported 
annually  by  manufacturers  of  agricultural  machinery,  on  which 
a  rebate  of  99  per  cent  of  the  duty  is  allowed,  equal  to  about 
$2.80  per  gross  ton  from  United  States  sources  and  $1.68  from 
English  sources.  This  rebate  would  have  to  be  absorbed  by 
Canadian  furnaces  to  secure  this  share  of  the  business. 


Maritime  Provikces 


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II.   Map  of  the  Makitime  Pkovinces 


BIBLIOGRAPHY 


BIBLIOGRAPHY 


Of  the  literature  available  on  the  conditions,  historj',  and  de- 
velopment of  the  Canadian  iron  and  steel  industrj-,  the  greater 
part  is  scattered,  and  not  readily  available.  The  early  history 
has  been  rather  satisfactorily  treated  in  the  Report  of  the  Geologi- 
cal Survey  of  1873-187 Ji,  in  Bartlett's  paper  on  The  Manufacture 
of  Iron  in  Canada,  and  in  the  1908  Report  of  the  Ontario  Bureau 
of  Mines,  as  well  as  the  Report  of  the  Royal  Comviission  on  the 
Mineral  Resources  qf  Ontario.  For  more  recent  development 
the  writer  has  relied  on  editorial  articles  in  trade  and  financial 
journals,  annual  Government  reports,  the  innumerable  papers 
published  in  the  various  magazines  and  journals,  and  also  a  few 
secondary  sources. 

Many  of  the  sources  of  information,  particularly  the  earlier 
papers,  give  chief  attention  to  the  matter  of  resources,  but,  of 
recent  years,  the  tariff  and  bounties,  trustc  and  finance,  have  come 
into  prominence.  Porritt's  articles  and  books  on  protection  and 
bounti'S  are  unnecessarily  partisan  on  the  free-trade  side,  and 
unfortunately  devote  too  much  attention  to  the  political  aspects 
of  the  situation.  Sixty  Years  of  Protection  in  Canada  suffers  from 
the  lack  of  an  intensive  knowledge  of  the  individual  schedules; 
The  Revolt  in  Canada  is  altogether  too  dogmatic  in  character  to 
be  convincing.  Mr.  McLean's  The  Tariff  History  of  Canada,  while 
accurate,  is  rather  non-critical.  Unfortunately  it  does  not  cover 
the  period  from  1894  to  the  present.  The  House  of  Commons  De- 
bates are  not  a  valuable  source  of  detailed  information.  Mr.  Field's 
annual  discussions  of  industrial  combinations  describe  financial 
phases  of  the  Canadian  mergers;  but  little  attempt  has  been  made 
to  estimate  the  actual  extent  of  consolidation.  Mr.  G.  E.  Drum- 
mond's  numerous  papers  on  the  Canadian  iron  industry  give 
the  fairest  statement  of  the  case  for  protection.  Of  Government 
documents,  the  report-*  on  the  Production  of  Iron  and  S'''el  in 
Canada  are  by  far  tht  most  valuable.  The  annual  reports  and 
pamphlets  issued  by  the  iron  and  steel  companies  themselves, 
together  with  the  circulars  of  established  P.nancial  hotises,  the 
prospectuses  of  corporations,  and  the  memorials  presented  to  the 
Government  in  favor  of  protection  are,  however,  quite  inter- 
esting, and  contain  most  significant  information. 


'  'l  i, 
l'  ■ 


S60 


BIBUOGRAPHY 


The  following  Ust  of  references  is  practically  complete,  except 
in  respect  to  short  articles  published  in  a  number  of  trade  and 
other  journals.  A  reference  to  the  indices  of  these  journals  will 
unearth  many  more  sources  generally  referred  to  under  Group  II. 
The  more  important  of  such  articles  have  been  listed.  The  ab- 
breviations which  follow  the  list  of  trade  journals  and  bulletins 
explain  the  references  in  Group  VTI. 


i^/  ; 


BiBUOGRAPHIES 

1.  Canada;  Geological  Survey:  General  Index  to  the  Reports 
of  Progress,  1863-84.   (C.G.S.) 

2.  Canada:  Geological  Survey:  A  list  of  publications  on  the 
economic  minerals  of  Canada;  1888. 

8.  Gagnon,  Phileas:  Essai  de  Bibliographic  Canadienne.  Que- 
bec, 1895. 

4.  United  States:  Library  of  Congress:  Select  list  of  books  with 
references  to  periodicals  relating  to  iron  and  steel  in  com- 
merce, by  A.  P.  C.  Griffin.  Washington,  Government  Print- 
ing Office,  1907. 

5.  University  of  Toronto:  Review  of  Historical  Publications 
Relating  to  Canada.  Toronto,  University  Press;  1896-. 

6.  Canada:  Geological  Survey:  Catalogue  of  Publications  of  the 
Geological  Survey  of  Canada;  1910. 


n 

Trade  Journals  and  Magazines 

1.  American  Industry.  (A.I.) 

2.  American  Manvfacturer  and  Iron  World.  Pittsburg.   (A.M.) 

3.  Canadian  Engineer.  Toronto.   (C.E.) 

4.  Canadian  Mih  <ng  Review.  Toronto.   (C.M.R.) 
Canadian  Mining  Journal.  Toronto,  since  1907.   (C.M.J.) 

5.  Canadian  Manufacturer.    Toronto.   (CM.) 

6.  Colliery  Guardian.  London.   (C.G.) 

7.  Commercial  and  Financial  Chronicle.  New  York.  (Chr.) 

8.  Economist.  London.  (E.C.) 

9.  Engineering  and  Mining  Journal.  New  York.  (E.M.J.) 

10.  Engineering  Magazine.  New  York.   (E.M.) 

11.  Engineering  News.  New  York.   (E.N.) 

12.  Financial  Post.  Toronto.   (P.P.) 

13.  Uardware  and.  Metal.  Toronto.   (H.  &  M.) 


BIBUOGRAPHY 

14.  Iron  Age.  New  York.  (I.A.) 

15.  Iron  and  Coal  Trades  Review.  London.  (I.C.T.R.) 

16.  Iron  and  Steel  Trade  Journal.  London.   (I.S.T.J.) 

17.  Iron  Trade  Review.  New  York.   (LT.R.) 

18.  Mines  and  Mining.  Cleveland.  (M.  ft  M.) 

19.  Mining  World  and  Engineering  Record.  New  York. 
&  E.R.) 

20.  Monetary  Times.  Toronto.  (M.T.) 


S61 


(M.W. 


m 

Annual  Pubucations 

1.  American  Iron  and  Steel  Association:  Directory  cf  Works. 
1908  edition,  Philadelphia. 

2.  AnniuU  Financial  Review.   Canadian.  Toronto. 
8.  Bukdette's  Official  Intelligence.  London. 

4.  Canadian  Almanac.  Toronto. 

5.  Canadian  Annual  Review.  Toronto. 

6.  Canadian  Mining  Mamial.  Toronto. 

7.  Canadian  Trade  Index  (Canadian  Manufacturers'  Associa- 
tion.) Toronto. 

8.  Commercial  Intelligence.  London. 

9.  Heaton's  Anntud  Co  imercial  Hand-Book  qf  Canada.   Hea- 
ton's  Agency.  Toronto. 

10.  Ingalls,  W.  R.,  Mineral  Industry.    New  York. 

11.  Moody's  Corporation  Maniud.  New  York. 


IV 

BuUiETINS   AND   PAPERS   OF   ASSOCIATIONS   AND  INSTITUTES 

1.  American    Institute    of    Mining    Engineers:    Transactions 
and  Proceedings.  (A.I.M.E.) 

2.  American  Iron  and  Steel  Association  Bulletin.  (A.I.  &  S.A.) 
S.  Canadian  Mining  Institute:  Quarterly  Bulletin.  (C.M.I.) 

4.  Mining  Association  of  Quebec.  Transactions.  (M.A.Que.) 

5.  Mining  Society  of  Nova  Scotia.  Transactions.   (M.S.N.S.) 

6.  Royal  Society  of  Canada;  Proceedings  and  Transactions. 
(R.S.C.) 

7.  Iron  and  Steel  Institute:  Journals. 


S62 


BIBUOGRAPHY 


h 


Books  and  Pamphlets 

-k    1.  Bahtlett,  R.  J.,  Canada's  Century.  London,  1907. 

2.  Campbell,  D.,  History  of  Nova  Snnfin.  Montrpn!.  1973. 

3.  Chisholm,  G.  G.,  Commercial  Geography.    New  York,  1899. 

4.  Day,  S.  P..  English  America.  London,  1864. 

5.  Gesner,  a.,  Industrial  Resources  of  Nova  Scotia.    Halifax, 
1849. 

1   6.  Harpell,  J.  J.,  Canadian  National  Economy.  Toronto,  1911. 

7.  Hopkins,  J.  C,  Canada;  an  Enq/clopedia.  Toronto,  1899, 

8.  HoLLiNGswoRTH,  S.,  The  Present  State  of  Nova  Scotia.  1787. 

9.  Jeans.  J.  S.,  Canada's  Resources  and  Possibilities.  London. 
1904. 

10.  Kalm.  Peter,  Travels  in  North  America.  London,  1771. 

11.  Kemp,  J.  F.,  The  Ore  Deposits  of  the  United  States  and  Canada. 
New  York.  1900. 

12.  MacDonald,  C.  O..  The  Coal  and  Iron  Industries  of  Nova 
Scotia.  Halifax,  1909. 

*.    13.  McLean,  S.  J.,  The  Tariff  History  of  Canada.   University 

of  Toronto  Studies  in  Political  Science.  No.  4.   Toronto, 

1895. 
)    14.  PoBRiTT,  E.,  Sixty  Years  of  Protection  '    Canada.  London, 

1908. 
i\   15.  PoRRiTT,  E..  The  Revolt  of  Canada  against  the  New  Feudalism: 

The  Tariff  History  of  Canada  from  the  RevLian  of  1907  to  the 

Uprising  of  the  West  in  1910.  London,  1911. 
16.  Smith,  W.  H.,  Canada.  Toronto,  1852. 
-?    17.  Smith,  J.  R.,  The  Story  of  Iron  and  Steel.  New  York,  1908. 

18.  Swank,  J.  M.,  Iron  in  all  Ages.  Philadelphia,  1892. 

19.  Thwaites,  R.  G.,  Jesuit  Relatior^.  Cleveland,  1901. 

20.  Wilson,  A.  J.,  Resources  of  Modem  Nations.  London,  1878. 

21.  Wood,  C,  Iron  and  Steel:  Their  Production  and  Manufacture. 
London,  1911. 

22.  Nova  Scotia  Steel  and  Coal  Company,  Pamphlets.  1908 
and  1909.  • 

23.  Dominion  Steel  Corporation,  Pamphlet,  1911. 

24.  The  Iron  Ore  Resources  of  the  World.  Stockholm,  1910. 

25.  Memorial  of  Canadian  Iron  and  Steel  Companies  to  the  Fi- 
nance Minister,  November  21,  1911. 

26.  Pamphlet,  obviously  circulated  by  the  iron  and  steel  inter- 
esU.  1912. 


t  { 


•^^ 


BIBUOGRAPHY 


363 


«7.  Financial  circulars  and  pamphlets  of  bond  houses  and  stock- 
brokers. 

28.  Prospectuses  of  corporations. 

29.  Annual  reports  of  corporations. 

VI 

GoviaiNMENT  Resorts 
Federal;  anmud  and  special 
1.  Annual  Reports  of  Progress  of  the  Geological  Surv^:  es- 
pecially  1873-74:  Harrington,  '|  Notes  on  the  Iron  Ores  of 
Canada  and  their  Development." 
Canada's  Fertile  Northland.  1907. 

Reports  of  the  Mines  Branch  of  the  Department  >f  Mmes. 
Annual  Reports  of  Mineral  Production  in  Canada  (smce 

1906).  ^        ,     .     ^.  ,     J 

6,  The  Production  of  Iron  and  Steel  m  Canada  m  Calendar 
Yejirs.  Mines  Branch  of  the  Department  of  Mines. 

6.  Resource  Map  of  Canada.  Department  of  Interior. 

7.  Reports  of  the  Department  of  Tiade  and  Commerce. 

8.  Auditor-General's  Reports. 

9.  House  of  Commons  Debates. 

10.  Census  Reports,  1871,  1881, 1891,  1901,  1911. 

11.  Canada  Year  Book.  , 

12.  Report  on  the  Mining  and  Metallurgical  Industries  of  Can- 
ada, 1907-08.  .     ,.     1   r. 
Report  on  the  Iron  Ore  Deposits  of  Nova  Scotia,  by  J.  t. 
Woodman,  1909.  Mines  Branch  of  the  Department  of  Mines. 
Report  on  the  Iron  Ore  Deposits  of  Vancouver  and  Texada 


2. 
3. 
4. 


IS. 


14 


15. 


16. 


17. 

18. 


Islands,  B.C.,  by  E.  Lindeman.   Mines  Branch  of  the  De- 
partment of  Mines,  1909. 

Report  on  Experiments  made  at  Sault  Ste.  Marie  under 
Government  Auspices  in  the  Smelting  of  Canadian  Iron  Ores 
by  the  Electro-thermic  Process,  by  Eugene  Haanel,  1907. 
Report  of  a  Commission  to  investigate  the  Different  Electro- 
thermic  Processes  for  Smelting  Iron  Ores  and  Making  Steel 
in  Operation  in  Europe,  by  Eugene  Haanel,  1906. 
Reports  of  the  Commission  of  Conservation. 
Statutes. 


Provincial 
1.  Annual  Reports  of  the  Ontario  Bureau  of  Mines,  Toronto. 
(The  1908  report  is  of  special  value.) 


)-^ 


364 


BIBUOGRAPHY 


2.  Report  of  Royal  Commission  on  the  Mineral  Resources  of 
Ontario,  1890.  (This  gives  an  excellent  summary  of  the 
eaily  history  of  the  industry  of  Ontario.) 

3.  Nova  Scotia,  Department  of  Mines  Reports. 

4.  Reports  of  the  Minister  of  Mines,  British  Columbia. 

5.  Reports  on  mining  operations  in  Quebec. 

6.  Law  Reports.   (Privately  printed.) 

7.  Report  of  Department  of  Crown  Lands,  New  Brunswick. 

8.  Statutes. 

United  States 

1.  Reports  of  the  Geological  Survey;  Mineral  Resources  of  the 
United  States.  Washington,  Government  Printing  Office. 

2.  Aldrich  Report  on  wholesale  prices. 

8.  Statistical  Abstract  of  the  United  States. 
4.  Statutes. 

vn 

AnxicLEs 

Barbie,  J.  S.,  The  Coal  and  Iron  Industries  of  Eastern  Canada. 

C.G.  Feb.  15,  1901. 
Bahtlett,  J.  H.,  The  Canadian  Iron  Trade.  C.M.R.  1897. 

Manufacture  of  Iron  in  Canada.    A.I.M.E., 
1885. 
Blackmobb,  W.,  The  Question  of  Free  Coal.  CM.R.,  Jan.  31, 
1903. 
The  Development  of  Coal  Mining  in  Canada 
and  its  Effect  on  the  Industries.    C.M.R., 
Aug.  31,  1904. 
^  Iron  Manufacture  in  Ontario.   A.I.M.E.,  vol. 

XiV. 

Cantlet,  C.  L.,  a  Sketch  of  the  Development  and   Present 
Operations  in  the  Iron  and  Steel  L>dustry  of  Nova  Scotia. 
C.M.I.,  1913,  pp.  310-50. 
Chambgbs,  R.  E.,  The  Sinking  of  Wabana  Submarine  Slopes, 
Newfoundland.    C.M.J.,  Feb.  15,  1909. 
A  Newfoundland  Iron  Deposit.    I.A.,  April 
2,  1896. 
Chubch,  G.  E.,  Canada  and  its  Trade  Routes.     Fortnightly, 
vol.  LXXIX. 

Coles,  G.  W.,  The  Development  of  Canada.    Cassier's  Mag., 
1905. 


BIBUOGRAPHY 


985 


Druuhokd,  G.  E.,  The  Canadian  Iron  Industry;  a  New  Era. 

C.M.R.,  vol.  xvm. 

The  Canadian  Iron  Industry.  C.M.I.,  1896. 

The  Canadian  Iron  Industry.  C.M.I.,  1902. 

The  Canadian  Iron  Industry;  in  Ho'>kins, 

Canada,  vol.  v.  p.  608. 

Drdihond,  T.  J.,  Progress  of  the  Canadian  Iron  and  Steel 

Industry.  CM.,  1910. 
Evans,  J.  W.,  Experiments  in  Steel  Direct  from  Ores  with  Elec- 
tric Furnaces;  Methods  and  Results.  C.M.I.,  1906. 
F  JLD,  F.  W.,  industrial  Amalgamations    in    Canada.    M.S., 

Sept.  10,  1911;  Jan.  6,  1912;  Jan.  5,  1913. 
Fraser,  J.  D.,  From  iron  Ore  to  Steei:  a  Sketch  of  Iron-making 

in  Pictou  County,  N.S.  C.E.,  vol.  ii. 
GooDwm,  W.  L.,  Helen  Iron  District.  C.M.J.,  vol.  xxxn. 
Griffins,  P.  H.,  The  Manufacture  of  Charcoal  Iron  from  Bay 
Ores  and  Lake  Ores  of  the  Three  Rivers  Disr- 
trict  in  the  Province  of  Quebec.  C.J.,  1893. 
Description  of  Plants  of  Iron  and  Steel  Works 
in  Canada;  the  Location  of  their  Raw  Ma- 
terials and  their  Position  as  regards  the  Home 
and  Foreign  Markets,  together  with  Discus- 
sion of  Future  Developments.    C.M.J.,  vol. 

XXXI.  t 

The     Canadian      Iron     Furnace     Company. 
A.I.M.E.,  1893. 
GiLPm,  E.,  Analysis  of  United  States  Coals  and  Otner  Minerals. 

C.E.,  1897. 

Haanel,  E.,  The  Iron  Ores  of  Canada;  in  Iron  Ore  Resources  of 

the  World,  pp.  719-43,  published  by  the  Executive  Committee 

of  the  International  Geological  Congress  of  1910  (Stockholm). 

BL/>  ROMAN,  J.  E.,  A  New  Iron  Ore  Field  in  New  Brunswick. 

C.M.I.,  1908. 
Jeans,  J.  S.,  The  Shifting  Site  of  National  Industries  Supremacy. 
CM.,  vol.  XX. 
Future  Supremacy  in  the  Iron  Markets  of  the 
World.  E.M.,  vol.  XIV. 
Keeper,  T.  C,  The  Canals  of  Canada.  R.C.C,  1893,  p.  46. 
Leach,  N.  L.,  Moose  Mountain  Iron  Range.  C.M.J.,  1908. 
Leith,  C  R.,  The  Iron  Ores  of  Canada.  C.M.I.,  1908. 
Law,  a.  p..  Iron  Ores  of  the  Labrador  Peninsula.  E.M.,  vol.  xix. 
Luty,  B.  E.  v..  Future  of  the  American  Iron  Costs.  I.C.T.R., 
1903. 


S86 


BIBLIOGRAPHY 


Hi  - 
1" 


McGrath.  p.  S.,  The  Commercial  and  Industrial  Expansion  of 
Canada. 
American  Review  of  Reviews,  1904. 
The  Manufacture  of  Iron  and  Steel  in  Cape 
Breton.  E.M.,  vol.  xxi. 
MoxHAM  A.  J.,  Steel-making  in  Canada;  Canadian  Advantages. 

NiTZE.  H.  B.  E.,  The  Wabana  Iron  Ore  Mines.    M.  &  M..  1000. 

PoHRiTT,  E.,  Bounties  for  Canadian  Iron  and  Steel  Industry, 

1894-1006.  I.A..  1006.  ^ 

Iron   and   Steel   Bounties   in   Canada.    Pohtical 

Science  Quarterly,  1007. 

Philups,  E.,  Competition  in  Iron-  and  Steel-makmg.     E.M., 

vol.  XXI.  ,  c        I    t  T 

Stansfield.  a..  Electro-thermic  Production  of  Steel  from  Iron 

Ore.  C.M.J.,  1907.  ,  ^  ^ 

Taussig,  F.  W.,  The  Iron  Industry  of  the  United  States,  tjuar- 

terly  Journal  of  Economics,  1000. 
WiLMOTr,  V.  B.,  The  Iron  Ores  of  Ontario.  C.M.J..  1908. 
Iron  Mining  in  Ontario.  C.M.J.,  1907. 
The  Undeveloped  Iron  Resources  of  Canada. 
C.M.J.,  vol.  xxxii,  1001. 
WuRTLLE,  F.  C.  A  Historical  Record  of  the  St.  Maurice  Forges. 
R.S.C.,  1886. 


INDEX 


■Hi! 


INDEX 


Abbot  Iron  Works,  171. 

Abbot-Mitchell  Iron  Co.,  «S0,  M8. 

Acadia,  7. 

Acadia  Coal  Co.,  108. 

Agriculture,  11. 

Agricultural  impiementa,  88,  ISS, 

147,  S12. 
Aitken.  W.  M.,  Ml.  477.  «80.  «8«. 
Alabama  iron,  97.  20«. 
Albion  coal  mines,  59. 
Algoma  Central  Ry.,  17«. 
Algoma  Steel  Co.,  191.  411,  «4«: 

bounties,    144,    SOS;    combines, 

867.  285,  291;  Uriff.  146,  160. 
Algoma  Tube  Works,  214. 
Allen,  H.  M.,  279,  «81. 
American  Steel  and  Wire  Co.,  274. 
Amherst,  119. 
Angus,  W.  F.,  269. 
Annapolis  Co.,  25,  68. 
Annapolis  Iron  Co.,  124. 
Annapolis  Iron  Mining  Co.,  224. 

268. 
Annapolis  Mining  Co.,  55,  68. 
Antigonish  County,  ores,  26, 195. 
Arisaig  County  ores,  195. 
Ashbridge's  marsh,  231. 
Atikokan  ores,  S2,  271. 
Atikokan  Iron  Co.,  228.  281,  285; 

bonused,  171,  228. 
Atlas  Tack  Co..  248. 
Autonomy  of  Canada,  65. 

Bale  St.  Paul,  68. 

Balance  of  trade,  91,  97,  104. 

Bar  iron,  duties,  66.  84/.,  88,  1S2, 

312;  imports.  S43;  prices,  99,  S43. 
Bastican,  46.  231. 
Bathurst,  N.B..  ores,  29.  225,  269. 
Bay  of  Quinte  Ry.,  231. 
Belle  Isd..  ores.  113,  201. 
Belleville,  52. 
Belleville  Iron  and  Horseshoe  Co., 

250. 
Belleville  Rolling  Mills  Co..  119. 
Benn.  J.  H..  280,  282. 


Bentley,  Mr.,  59. 

Bessemer  ores,  24. 

Bessemer  process,  59,  98,  106,  203, 

215,  288,  291. 
Bigelow,  F.  D.,  118. 
Billets,    steel,    bounties,   34,   148. 
149/.;  duUes,  66/.,  84/.,  182, 
812. 
Birge,  C.  A.,  280. 
BlackweU,  K.  W,  118,  269,  279, 

281. 
Blair,  G.  W.,  175. 
Bloomfield  ores,  57. 
Blooms,  steel,  dutes.  66.  84.  132. 
Bonuses,  municipal.  90, 114, 171/., 

312,  317. 
Borden,  R.  L.,  protection,  142. 
Boston,  56;  smoke  nuisance  law  of, 

200. 
Bounties,  acts,  85, 88, 134, 143 ,149. 
158,    187;   combines,   310;   Mr. 
Conmee,  147;  considered,  156/.; 
Dominion   Iron  and   Steel  Co., 
158,  203;  Dnmimond,  G.  E.,  144; 
dumping,  electric  process,   188, 
316;  ended.  153;  farmers,  151; 
Fielding,  W.  S.,  151,  311,  312; 
foreign  countries,   136,  150  /.; 
Foster,  G.   E..   137,    154;  pay- 
ments, 103,  834,  336;  Plummer, 
J.  II.,  296;  protection,  154;  reve- 
nue. 149.  151;  315;  Tapper.  Sir 
Chas..  140.  154.  203. 
Bourassa.  Mr.,  protection.  98. 
Brantford  Screw  Co..  250. 
Bras  d'Or  Lake,  coal,  196,  204. 
BridgevUle,  117,  120,  287. 
British  Columbia  ores,  35,  234, 271. 
British  Columbia  Steel  Co.,  234. 
British  North  America  Act,  13. 
Buchanan,  Isaac,  protection.  83. 
Buffalo,  51,  71. 

Buffalo  Union  Furnace  Co.,  240. 
Burpee,  Mr.,  protection,  99. 
Burrows,  Thos..  115. 
BuUer,  M.  J..  62,  298. 


870 


INDEX 


Caledonia  Ironworlu.  1 10. 

Calgary  ores,  471. 

Canada  Bolt  and  Nut  Co..  «30.  SAO. 

Canadu  Car  Co.,  470. 

Canada   Car   and   Manufacturing 

Co..  61.  74. 
Canada  Furnace  Co.,  191. 
Canada  Ir«n  ("orporation.  191,  469, 
47.S,  476,  479,  484;  integration, 
495. 
Canada  Iron  Furnace  Co.,  90,  101, 
100,  440.  408;  Midland  furnace. 
444,  47.S:  Uriff,  199.  800. 
Canada  Iron  and  Manufacturing, 

46. 
Canada  Locomotive  Co.,  480. 
Canada  Screw  Co.,  440,  444,  451. 
Canada  Switch  Manufacturing  Co., 

118. 
Canada  Tin  Plate  and  Sheet  Steel 

Co..  438. 
Canada  TiUnic  Iron  Co..  48,  63. 
Canadian  autonomy,  65. 
Canadian    Bridge   Co.,    dumping. 

185. 
Canadian  Car  and  Foundry  Co.. 

446.  476.  48.S. 
Canadian  Coal  and  Ore  Dock  Co., 

448. 
Canadian    Hardware    Association, 

474. 
Canadian  Iron  an>i  Foundry  Co., 

445. 
Canadian  Iron  and  Steel  Co.,  115. 
Canadian  Manufacturers'  Associa- 

tio.n,  1  V4,  184;  protection.  95. 
Canadian  Northern  Railway,  176, 

414,  448. 
Canadian  Pacific  Railway.  85,  118, 

178. 
Canadian  Steel  Foundries.  448,  470, 

476,  480. 
Canals,  Erie.  10;  industrial  develop- 
ment, 8;  iron  and  steel,  71;  St. 
Lawrence,  0,  71. 
Cannelton  Coal  and  Coke  Co.,  218. 

467. 
Cape  Breton,  coal.  195;  ores.  46. 
CapiUl,  lack.  IS.  73.  143. 
Capitalization,  447^. 
Caverhill,  G.,  481. 
Champlain  Co..  4.  91. 
Charcoal  iron.  70,  349. 
Charlton.  Mr.,  protection,  98. 


Cherry  Bluif,  M. 
Chesley.  J.  and  W.,  118. 

Chicago,  51.  71. 
Cli-mentsport,  45.  55. 
Clergue.  F.  H.,  414.  487.  478.  498. 
Clergue  contract.  174.  414. 
Climate,  ind  utrial  development.  0, 
908;  migr:ition.  9;  population.  9; 
transportation.  10. 
Coal.  14.  70;  Bras  d'Or  Lake,  196. 
404;  Cape  Breton.  195;  Dominion 
Iron  and  Steel  Co..  48.  405.  457; 
duties.  66.  84.  133.  146;  exports, 
400;  General  Mining  Association. 
56.  455.  489;  maritime  provinces, 
45;    OnUrio.    SS;   Quebec.    91; 
West.  36. 
Cobourg.  54. 

Cockschutt  Plow  Co..  480.  484. 
Coke.  340;  duties.  66.  84.  139.  148; 

imports.  949. 
Colbert.  41. 

Colbrook  Rolling  Mills.  64.  118. 
Colchester  Co.  ores,  45. 
Combines.  40.  96,  119.   153.  444, 
310.  944;  bounties.  310;  in  rolling 
mill  industry,   444;  Uriff,   160, 
415.  484. 
Compound  duties.  86,  06. 
Conception  Bay,  113. 
Confederation  and  the  tariff,  66. 
Conmee.   Mr.,   and  the   bounties. 

147. 
Connellsville  coke,  491. 
Conservative  party.  147.  131.  408, 
314.  318,  340;  protection.  16,  83, 
155. 
Consolidated   Lake   Superior  Co., 
formed.   414.    467;   failed.   415; 
relations  with  Ontario  Govern- 
ment. 174. 
Convict  labor.  133. 
Com  kws,  14;  repeated.  65. 
Corporations,  143. 
Cost  of  production,  319. 
Cox,  G.  A..  116.  481. 
Cramp  Steel  Co..  171,  487. 
Cuban  ores,  205 
Cugnet  et  Cie,  44. 
Cumberland  Coal  and  Railway  Co., 

48,  464,  479,  489. 
Curry  (Rhodes)  Car  and  Foundry 

Co.,  470;  119.  446. 
Currv,  N..  480. 


INDEX 


871 


DanduranH.  R..  981. 

Depreuion,  AS,  8S. 

Deaeronto,  139.  iSl;  Uriff.  101, 
«S1. 

Directonte*  interiocking,  278  jf. 

Dominiun  Bridge  Co.,  118. 

Dominion  Car  Co.,  8128. 

Dominion  Coal  Co..  139,  800.  805, 
2J7.  879,  881,  889. 

Dominion  Iron  and  Steel  Co., 
formed.  800;  reorganised,  808; 
bounties.  138,  80  '>oal,  88,  803, 
237;  tariff,  138,  1  M,  139. 

Dominion  Steel  v  o.poration, 
formed,  810;  840,  833,  873.  870, 
870,  883,  808;  integration.  893; 
scale  of  production,  810. 

Dominion  Wire  Rope  Co.^  118. 

Drawbacks,  83,  146,  168;  manufac- 
turers. 170,  306,  318.  348. 

Drummond,  G.  E.,  880;  bounties, 
144. 

Drummond.  H.  R..  879. 

Dru'am  md,  T.  J.,  870,  282,  298. 

Drummondville,  109, 180, 101.  268; 
tariff.  183. 

Drummond  MeCall  Pipe  Foundry, 
119;  at  Londonderry,  868,  876. 

Drummond  Mining  Co.,  869. 

Dumping,  91,  176.  188,  814.  838. 
306.  313.  330,  333;  bounties,  188, 
816;  Canadian  Bridge  Co.,  183; 
Dominion  Iron  and  Steel  Co., 
158,  203;  exports  dumped.  153, 
179;  Fender  Co.,  807;  Plummer, 
J.  H..  181;  rails.  806. 

Duties.  66,  84,  138,  146,  818;  com- 
pound, 86,  96;  336;  Imperial,  65, 
168;  prices,  99;  jpecific,  87.  96. 

East  River  jres,  1 18. 
Eastern  Car  Co..  \97.  856. 
Electric  Furaace  i?rc  lucts  Co..  838. 
Electric  Meials  Co.,  *32. 
Electric  pros ,;  '.  231;  bounties,  149, 

315. 
Electric  Reduction  Co.,  233. 
Electric  Stet!  Co..  238. 
Emigration,  17. 
England.  121. 
Equitable  Mining  and  Developing 

Co..  219.  250. 
E^sex  Co..  53. 
Evans.  J.  £.,  233. 


Exports,  74.  91.  110.  150.  800.  80S, 
385;  dumping.  153,  179. 

Farmers,  bounties,  151;  tariff,  139, 

147.  156.  159,  318. 
Farrell.  J..  163.  878. 
Ferrona.  89.  118.  191.  194.  987. 
Fielding.    W.    S.,    134,    148.    154; 

bounties.  151.  311,  317;  British 

preference,  162. 
Finishing  industry,  59,  76.  84.  836. 

843. 300;  and  protection,  124, 304. 
Forget,  R..  874 
Fort  William.  880. 
Foster.  G.  E.,  bounties,  1S7,  154; 

Uriff.  94,  97. 
Foundry  iron,  98. 
Francheville,  M.,  48. 
Frankcl.  W.,  840. 
Franquet.  M..  48. 
Eraser.  G..  63;  letter  to  Whitney, 

803. 
Eraser,  J.  D.,  229. 
Freight  rates,  10;  for  ores.  34;  for 

coal,  70;  for  iron.  174;  protection, 

03,  94. 
French  Regime,  56,  65. 
Frontenac,  48. 
Fuel.  70. 

Fund  for  iron  mining.  89,  114,  179. 
Furnace  FaUs.  49,  115. 

Gananoque  Bolt  Co.,  850. 

Gananoque  Nut  Factory.  110. 

General  Mining  Association,  coal 
mines.  56;  sold,  235.  289. 

Gentlemen's  agreements.  276. 

Geographic  factors,  8. 

German  surtax,  153. 

Germany.  3.  176. 

Gibson.  Hon.  Wm..  280. 

Glace  Bay,  158.  811.  888. 

Graham  Nail  Co.,  853. 

Graham  Nail  Works,   ombine,  946. 

Grand  Piles.  109.  826. 

Grand  Trunk  Pacific  Riulway.  178, 
217. 

Grand  Trunk  Railway,  114. 

Great  Britain.  3,  48,  53;  imports 
from,  63,  68.  77,  98.  107.  153, 
104;  iron  and  steel.  65;  protec- 
tion in.  93;  Uriff.  143. 

Great  Northern  Railway  of  Eng- 
land, 180. 


872 


INDEX 


Great  Village  River.  58. 
Great  Western  Railway,  64,  61. 
Greening,  P.,  61. 
GzowskI  and  Macpherson,  61. 

Halifax,  152. 
Halifax  rolling  mills,  118. 
Hamilton.  51. 61, 120, 152. 191, 299. 
Hamilton  Blast  Furnace  Co..  89, 

90,  191;  bonused,  90,  114,  125; 

combine,  244;  formed.  101,  114; 

teriff,  300. 
Hamilton  Iron  and  Steel  Co..  220; 

combine.  249;  tariff,  139. 
Hamilton  Iron  Mining  Co.,  219. 
Hamilton  Steel  and  Iron  Co.,  219; 

combine,  250. 
Hamilton  Steel  and  Wire  Co.,  119. 
Harris,  Mr.,  274. 
Hastings  County,  ore,  115. 
Haycock  Iron  Mine,  48,  54. 
Helen  Mine,  31.  212,  223.  288. 
Hcrault,  Dr.,  316. 
Hobson,  R.,  280. 
Hodgson  Iron  and  Tube  Co.,  221; 

Montreal  rolling  mills.  250. 
Houghton,  68. 

Immigration,  16. 

Imperial  duties,  65,  162. 

Imperial  Steel  and  Wire  Co.,  237. 

Implements,  88,  133.  147,  312. 

Imports,  351;  325;  bars,  342;  coke. 
329;  Great  Britain,  65,  68.  77. 
88,  98,  107.  153,  164;  iron  and 
steel,  339;  rails,  342;  rods.  342; 
United  SU-^es,  65. 165.  See  Dump- 
ing. 

Industrial  Canada,  180. 

Industrial  development,  capital, 
14.  17;  climate,  6,  9;  coal,  14,  17; 
geographic  features,  8,  15;  iron 
and  steel  industry,  18,  322;  man- 
ufacturing, 12;  natural  resources, 
4,  20 Jf.;  politics,  5,  7,  13;  popula- 
tion, 4.  6,  12,  16;  race.  5,  7;  tariff. 
13,  18;  transportation.  4.  6.  8.  9. 
10,  15-  17. 

Infant  industry.  319. 

Ingots,  331;  tariff,  84.  132;  imports, 
312 

Integration,  244/.,  267,  285,  295. 

Intercolonial  Railwav.  58,  62,  71, 
77,  112.  117,  216. 


Intermediate  tariff,  146. 

Investment  Trust  Co.,  269. 

Iron  and  steel.  65;  exports,  388; 

imports,  339. 
Irondale    and    Bancroft    Railway, 

116. 

Jaffray.  Hon.  R..  116,  280. 
Jenkins  and  Hardy,  246. 
Josephine  mine,  ores,  32,  215. 

Kaministikwia  River,  229. 
Kennedy  and  Sons.  240. 
Key  Inlet.  32. 
Kingston.  61,  116. 

Labor,  conditions,  42,  72,  298,  308; 
convict,  133;  protection,  92,  133. 

Labrador  and  Ungava,  ores.  34. 

Lac  a  la  Tortue.  ores.  109. 

Lachine,  109. 

Lake  Superior  Corporation,  216, 
267,  277.  279,  281.  283;  integra- 
tion, 295. 

Lake  Superior  Iron  and  Steel  Co., 
207. 

Lake  Superior  ores.  121,  136,  288. 

Lake  Superior  Power  Co.,  216. 

Land  subsidy.  Algoma  Central 
Railway.  172. 

Laurier,  Sir  W..  97. 

Leeds  County,  46,  49. 

Liberal  party,  bounties,  103,  126, 
131,  138.  153,  203,  317;  protec- 
tion, 16,  89,  103,  138.  155.  179, 
187;  reciprocity.  153. 

Lindsay.  116. 

Liverpool.  202. 

Localization,  242. 

London  Rolling  Mills,  253. 

London  Steel  Works,  116. 

Londonderry,  57.  60,  63,  68,  72,  94, 
120,  191;  ores.  28,  68,  288. 

Londonderry  Iron  Co,  102,  105, 
107,  191,  223,  268. 

Londonderry  Iron  and  Mining  Co., 
224,  268. 

Louisburg,  202. 

Lyndhurst,  49,  59,  69,  72. 

Mackay,  Hon.  R.,  279,  281. 
Mackenzie  and  Mann,  32.  214.  228, 

281,  282. 
Mackenzie  River,  35. 


INDEX 


373 


Magpie  Mine,  31,  218. 
Management,  297. 
Mann.  Sir  D.,  248,  280. 
Manufacturers,    drawbacks,    170 ; 

tariff,  134,  142,  170. 
Manufacturing,  12. 
Maritime  Nail  Co.,  246. 
Maritime  Provinces,  industry,  55 jf. ; 

duties,  65;  ores,  25,  29. 
Market,  293,  75,  98,  78,  122. 
Marmora,  52,  68,  71. 
Marmora  Foundry  Co.,  52. 
Mason,  Col.  J.,  281. 
Mason,  J.,  50. 
Massey-Harris  Co.,  protection,  95, 

247. 
Matthews,  W.  D.,  280. 
McDonnell  Rolling  Mills  Co.,  119; 

combine,  248,  250. 
McDougall,  E.,  281. 
McDougall,  G.,  108,  122,  268. 
McDougall,  J.,  45,  48,  268. 
McDougall,  J.,  &  Co.,  119,  226. 
McGill.  Hon.  P.,  51. 
Mclean,  S.  J.,  84. 
McMaster,  Hod.   Wm.,  273,  279, 

281. 
Memorials  re  tariff,  347  §. 
Metropolitan  Rolling  Mills,  118. 
Michigan  Central  Railroad,  216. 
Michipicoten,  289,  212/.,  310. 
Midland,  33;  bonus,  171;  Canada 

Iron  Furnace  Co.,  191,  214,  222, 

273. 
Midland  Railway  and  Iron  Co.,  116. 
Migration,  inward,  16;  outward,  17; 

westward,  8. 
Mineral  Iron  Range  Mining  Co., 

223. 
Mineral  Products  Co.,  240. 
Mines  Branch,  37. 
Moffat  Irving  Steel  Works,  233. 
Moisic  Iron  Co.,  47,  68,  72. 
Molson,  Hon.  H.  M.,  281. 
Monetary  Times,  i7S. 
Montreal,  9,  51,  60,  109,  152. 
Montreal  Car  Wheel  Co.,  118. 
Montreal   Rolling  Mills,   60,   118; 

combined    with    Hodgson    Iron 

and  Tube  Co..  221,  250;  Pillow- 

Hersey   Co.,   221;  Steel   Co.   of 

Canada,  220/.;  245,  279. 
Montreal  Steel  Works,  118, 227, 242, 

279;  combines,  268;  tariff,  140. 


Moo.se   Mountain,  Ltd.,  ores,  32, 

230.  271,  281. 
Moose  River,  N.S.,  55. 
MofRan,  J.  P.,  272. 
Morrow  Machine  Screw  Co.,  118. 
Moxham,  Mr.,  205. 
Mowat.  Sir  O.,  89. 

Nails,  68,  343. 

National  Policy,  begun,  13,  41,  67, 
83.  181,  308;  Buchanan.  83;  con- 
sidered, 124;  prices,  94,  124. 

Natural  resources;  see  Coal  and 
ores;  industrial  development,  4, 
20/. 

New  Brunswick,  56  ff. 

New  Brunswick  Iron  Co.,  260. 

Newfoundland  ores,  25,  29.  89, 121, 
288,  310. 

New  Glasgow,  63, 11 1, 120, 254, 289, 
297/,  bounties,  152;  tariff,  125. 

New  Glasgow  Coal,  Iron,  and  Rail- 
way Co.,  Ill,  112,  116,  254. 

New  Orleans.  202. 

New  York,  202. 

New  York  Central  Railway.  217. 

New  York-Nova  Scotia  Iron  and 
Coal  Mining  Co..  56. 

Nickel  steel.  174.  212. 

Nictaux  Falls,  25,  68.  107. 

Normandale,  50.  59,  68,  71. 

North  Sydney,  152,  195. 

Northern  Iron  and  Steel  Co.,  237. 

Northern  Pacific  Iron  and  Steel 
Co.,  234. 

Nova  Scotia  Forge  Co.,  63,  77,  111, 
254. 

Nova  Scotia  Midlands  Railway, 
117. 

Nova  Scotia  Miuing  Code,  173. 

Nova  Scotia  Steel  Co.,  89,  111.  118, 
194,  201,  242,  254,  279;  bonuses, 
171;  combines,  113,  120;  tariff, 
300. 

Nova  Scotia  Steel  and  Coal  Co., 
191,  194/.,  254/.,  274,  276,  282, 
287:  combines,  195;  integration, 
295;  tariff,  300. 

Nova  Scotia  Steel  and  Forge  Co., 
HI. 

Oliver  Iron  Mining  Co.,  271. 
Ontario.  7;  industry,  49/,  60,  63; 
ores,  25,  31. 


374 


INDEX 


Ontario  Iron  and  Steel  Co.,  227, 
270. 

Ontario  Lead  and  Barb  Wire  Co., 
118. 

Ontario  Rolling  Mills,  102,  118; 
combine,  219,  245,  248,  249. 

Ontario  Tack  Co.,  245,  250. 

Ores,  328;  Antigonish,  195;  Arisaig, 
195;  Atikokan,  32;  Baie  St.  Paul, 
68;  Bathurst.  29,  225,  269;  Besse- 
mer, 24;  British  Columbia,  35, 
234;  Calgary,  271;  Cape  Breton, 
26;  Colchester  County,  i5;  du- 
ties, 65,  68,  314;  exports,  S38; 
Hastings  County,  115;  Haycock, 
48.  54;  Helen  Mine,  31,  212,  22&, 
288;  Josephine,  32,  215;  Labra- 
dor, 34;  Lac  4  la  Tortue,  109; 
Lake  Superior,  121,  136.  288; 
Londonderry,  26,  68,  288;  Mnc- 
kenzie  River,  35;  Magpie,  at, 
218;  Maritime  Provinces,  25  Jf.; 
Michipicoten,  212  Jf.;  289.  310; 
Moose  Mountain,  32,  371,  281, 
230;  Newfoundland,  25,  89,  121, 
288,  310;  Nictaux,  25,  55,  68, 
107;  Northwest,  91;  Ontario,  25, 
81;  Pictou  County,  26;  Quebec, 
25,  30;  Sidney  Mines,  27;  Tex- 
ada,  35,  234;  Torbrook,  25,  107, 
224;  Vancouver  Isd.,  85;  Wa- 
bana,  29,  121,  288.  310. 

Pacific  Steel  Co.,  234. 

Pearson,  Dr.  F.  S.,  217. 

Peck,  Benny  &  Co.,  60;  combine, 
246. 

Pellatt,  Col.  Sir  H.,  281. 

Pender,  J.  &  Co.,  284. 

Pictou  County,  26, 115, 116;  dump- 
ing, 207;  tariff,  160. 

Pictou  Charcoal  Iron  Co.,  117,  121, 
240;  bounties,  125. 

Pictou  Coal  and  Iron  Co.,  59,  71, 
90,  106. 

Pig  iron.  326.  330;  bounties.  85, 
88.  134,  143.  149;  consumption, 
192,  294,  309,  Ml;  exports,  338; 
imports,  341;  prices,  343;  pro- 
duction, 191  /.,  309. 

Pillow-Hersey  Co.,  118;  combines, 
221,  246,  250. 

Pittsburg.  201. 

Plummer,    J.    H.,  bounties,    296; 


Dominion  Steel  Co.,  210,  258. 
281;  U.S.  Steel  Co.,  211;  dump- 
ing, 181;  tariff,  315. 

Point  Edward,  198. 

Politics.  See  Conservative  Party, 
and  Liberal  Party,  5,  7,  13. 

Pools,  248. 

Population,  4,  6,  9,  75,  325. 

Port  Arthur,  32,  191. 

Port  Colborne,  235,  240. 

Port  Dover,  51. 

Port  Hope,  51,  55. 

Portland  Rolling  Mills,  62,  118; 
combine,  246. 

Potter's  Creek,  50. 

Pratt  and  Letchworth  Co..  27  <. 

Preference.  British,  347,  146,  i«2/., 
187, 312;  Fielding,  162;  U.S.,  165. 

Prices,  13,  157,  96,  343,  353;  bar 
iron,  343;  Buffalo,  186-  Chicago, 
95;  combines,  245  /.;  ;  e  Dump- 
ing, Ferrona,  95;  Glasgow,  95; 
iron,  68,  73,  78,  82,  94;  London- 
derry, 94;  Montreal,  94;  nails, 
S43;"Philadelphia,  74, 95 ;  pig  iron, 
99;  protection,  94, 124,  157;  rails, 
343;  scrap  iron,  99,  101,  133; 
Toronto,  186, 

Protection,  begun,  67,  83;  Mr. 
Borden,  142;  bounties,  154; 
Bourassa,  Mr.,  98;  Buchanan, 
Mr.,  83;  Canadian  Manufac- 
turers' Association,  95;  Charl- 
ton, Mr.,  98;  Conservative 
Party,  18,  83,  155,  203,  312,  318, 
320;  considered,  li:4;  cost  of  pro- 
duction theory,  319;  finishing 
industry,  124;  freif^;ht  rates,  93; 
Great  Britain,  93;  labor,  92, 133; 
Liberal  Party,  16,  89,  103,  138, 
155,  179,  \U;  Mussey-Harris 
Co.,  95;  National  Poliej.  134; 
prices,  94,  124;  resources,  yi;  tin 
plates,  145.  147. 

Quebec,  41.  60,  63, 152;  ores,  25.  SO. 
Quebec  Colonization  Act,  89. 
Quebec  Steel  Works,  49. 

Race  question,  5,  7. 
Radnor,  33,  68,  121. 
Radnor  Forges.  46.  63.  68,  71,  101, 

109,   120,   191,  226,   268;  tariff, 

125. 


INDEX 


875 


Rails,  dumping,  208;  duties,  133, 
145,  175  /.,  305;  imports,  342; 
prices,  343. 

Railway  Act,  173. 

Railways,  325;  Algoma  Central, 
172;  Canadian  Northern,  176, 
214,  228;  Canadian  Pacific,  85, 
118,  178;  Grand  Trunk,  11,  14; 
Grand  Trunk  Pacific,  178,  217; 
Great  Northern  of  England,  180; 
Gr»At  Western,  54,  61;  Hudson's 
Bay,  34;  industrial  development, 
4,  11,  308;  Intercolonial,  15,  68, 
62,  63,  71.  77,  112,  117,  216; 
Irondale  and  Bancroft,  116;  iron 
and  steel  industry.  68,  71;  Michi- 
gan Central.  216;  New  York 
Central,  217;  Nova  Scotia  Mid- 
lands, 117;  protection,  156;  tariff, 
175  Jf. 

Reciprocity,  1854,  12,  13,  66;  191J 
18,  153,  159. 

Resources,  availability,  20  Jf.;  Cana- 
dian, 24-38;  importance,  287; 
mining,  20  Jf. ;  ownership,  2  ! ;  pro- 
tection, 91;  proximity.  22;  trans- 
portation, 21  ff. 

Revenue,  bounties,  151  Jf.;  tariff, 
67,  126,  131,  137. 

Roads,  10. 

Rods,  159;  bounties,  143  /.,  151, 
187;  Dominion  Iron  and  Steel 
Co.,  207;  duties,  66,  86.  133,  141. 
169;  imports.  342;  tariff,  286; 
U.S.  Steel  Co.,  207. 

Rogers,  Chas..  116. 

Rolling  Mills,  120;  combine,  244 Jf.; 
duties,  66,  84,  86,  132. 

Ross.  Jas.,  266. 

St.  Francis  River  Mining  Co.,  48. 
St.  John,  N.B.,  50,  62,  152. 
St.  John  Bolt  and  Nut  Co.,  118. 
St.  Lawrence,  Gulf,  201;  River,  8, 8, 

9. 
St.  Maurice  County,  31. 
St.  Maurice  Forges,  41  Jf.,  59,  63, 

08,  108.  121,  125,  308. 
St.  Paul's,  116. 
St.  Thomas,  109. 
Sandwich,  235. 
Sault  Ste.  Marie,  30.  162. 191.  212. 

283 
Scale  of  production,  123,  294,  310; 


Dominion  Iron  and  Steel  Co., 

210. 
Scrap  iron,  duties,  66,  84,  86,  95, 

132,  314;  prices,  99,  101,  133. 
Selling  bureau,  276. 
Sheet  iron,  duties,  66,  86. 
Shields,  C,  216. 
Shipbuilding,  Uriff,  84,  140. 
Siemens-Martin  process,  59,  63,  72, 

106,  107,  111,  107,  254,  292. 
Sjostedt,  M.  E.,  117. 
Smith,  v.,  62. 
Specialization,  283. 
Specific  duties,  87,  96. 
Speyer  and  Co.,  215. 
SpringhUl,  71,  106,  211. 
Springhill  Mining  Co.,  264. 
Springhill  and  Parsboro  Coal  and 

Railway  Co.,  264. 
Stansfield,  Dr.,  232. 
Steel,  bounties,  34, 143, 149/.;  con- 
sumption, 143,  293/.,  310,  317; 

exports,  338;  imports,  339;  nickel 

steel,  174,  212;  production,  193/., 

242,  310;  slabs,  66,  84,  86,  132; 

structural,  141;  wrought,  66. 
Steel  and  Radiation,  Ltd.,  282. 
Steel  Co.  of   Canada  (Hamilton), 

220/.,  250/.;  integration,  295; 

tariff,  160,  101. 
Steel  Co.  of  Canada  (Londonderry), 

58,  63,  125. 
Steel  Iron  and  Rwlway  Works  of 

Toronto,  61. 
Stellarton,  66,  68. 
Structural  steel,  842;  boimtios,  143 

/.,  187. 
Subsidies,  172. 
Sydney,  27,  162,  200,  240. 
Sydney  Lumber  Co.,  265. 
Sydney  Mines,  27, 152, 191, 255, 287. 

Tariff,  Acts,  65  /.,  84  /.,  132  /.; 
agricultural  implements,  88,  133, 
147,  312;  Canada  Iron  Furnace 
Co.,  139,  300;  Canadian  Pacific 
Railway,  85;  combines,  160, 
284/.,  316;  commission,  145, 148, 
350;  confederation,  66;  Dese- 
ronto  Iron  Co.,  139,  231.  191; 
Dominion  Iron  and  Steel  Co., 
138,  141,  148,  161,  169,  301, 
Great  Britain,  143;  Hamilton 
I     Iron  and  Steel  Co.,  139;  indus- 


876 


INDEX 


trial  deve?  pment,  IS,  18;  inter- 
mediate, 146;  manufacturers,  134, 
142;  memorials,  347  Jf.;  Mon- 
treal Steel  Works,  146;  Nova 
Scotia  Steel  Co.,  138,  142,  300; 
Pender,  J.,  &  Co.,  160;  P!ummer, 
J.  H.,  315;  Radnor  Forges,  125; 
railways,  175  jf. ;  revenue,  67,  126, 
131,  137;  rolling  mills,  304;  ship- 
building, 84.  140;  Steel  Co.,  of 
Canada,  160, 191;  tin  plate.  238; 
wire  rods.  286. 

Territories,  N.W.,  91. 

Texada  Isd.,  35,  234. 

Three  Rivers,  41,  44.  108. 

Tilley,  Sir  L..  tariff,  90. 

Tin  plate,  protection.  145;  tariff, 
238 

Torbr<x)k.  25,  107,  224. 

Torbrook  Iron  Co.,  107. 

Toronto,51,54,61, 192, 231.116, 152. 

Toronto  Bolt  and  Forging  Co.,  250. 

Toronto  Wire  and  Iron  Works,  60. 

Trade,  aggregate,  13,  16,  18,  325; 
balance,  91,  97,  104;  exports,  18; 
339/.;  imports,  18.  339/. 

Transport*  lion,  21  /.;  see  Canals, 
Roads,  Railways;  industrial  de- 
velopment, 4.  6.  8,  9.  10.  13.  17. 

Transvaal,  180. 

Trenton,  63.  Ill,  120. 195.  251.  299. 

Trusts,  244/. 

Tupper,  Sir  Chas..  91;  bounties. 
140.  154.  203. 

United  Empire  Loyalists.  12. 
United  States,  3.  4,  5,  60,  181;  im- 


ports from.  65.  165;  iron  indus- 
try, 192;  market,  75,  96, 141, 159, 
206/.;  preference,  165;  Uriff.  47, 
74.  86,  93,  137,  200. 
United  States  Steel  Corporation, 
14!.  146.  211.  235,  244.  251.  283; 
bounties,  150.  302;  dumping. 
177.  185.  207.  244;  wire  rods, 
207. 

Vancouver  Engineering  Works.  234. 
Vancouver  Isd.,  35. 
Van  Home,  Sir  W.  E.,  281. 
Van  Norman,  J.,  50,  51,  53. 
Victoria  Iron  Woiks,  60. 

Wabana   mine.   9.   121.  195.  200, 

288,  310. 
Wellana,  192,  227. 
Welland  Canal,  50. 
White,  W.  T.,  159,  312,  313. 
Whitney.  W.  H..  140.  200,  203,  257, 

273. 
Whycocomagh,  26. 
Wilbur.  33. 
Willcox.  C.  S.,  280. 
Wilson,  J.  R.,  118.  279,  281;  U.S. 

Steel  Co.,  211. 
Wire,  duties.  84,  145.  305. 
Wire  rods,  286;  bounties.  334. 
Wood.  E.  R..  281. 
Woodall.  W.  H..  246. 
Woodstock,     Charlotte     County, 

N.B..  29.  62.  56.  68,  72,  107. 
Woodstock  Charcoal  Iron  Co.,  67. 
Wrought  scrap  iron,  S41. 
Wrought  steel,  66. 


CAMBRIDGE  .  MASSACHUSETTS 
U   .   S    .  A 


rifa 


